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REPUBLICAN RAID ON STUDENT AID-The Battle Isn't Over!
The US House will vote again on the budget bill that cuts $12.7 BILLION out of federal Student Aid
(Pelosi 411 - News for Youth and Young Adults from the House Democratic Leader)
At 6 a.m. on December 19th, as many Americans were sleeping, the Republican-controlled House passed a budget-cutting bill that slashes $12.7 billion from the federal student aid programs to finance tax breaks for the wealthiest Americans. Seventy percent of the gross savings derived from the cuts to student aid generated in the bill are achieved by continuing the practice of forcing student and parent borrowers in many cases to pay excessive interest rates on their loans and by increasing college loan costs.
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But now the Republican Controlled Congress has a chance to undo the harmful cuts that they voted for in late December. On January 31st or February 1st the House of Representatives will vote again on this budget bill that cuts $12.7 BILLION out of federal Student Aid.
Congress should be making college more affordable, and it could do so at no new cost to taxpayers and without adding to the budget deficit. The federal government pays excessive subsidies to lending institutions in the student loan industry. By cutting those subsidies, Congress could use the savings to make college more affordable without costing taxpayers an extra dime.
But instead Republican leaders have chosen to allow big banks to keep their excessive taxpayer subsidies and to bestow multi-billion-dollar tax cuts on the wealthiest Americans - all at the expense of students and parents struggling to pay for college at a time of rapidly rising tuition costs.
Where do the savings come from?
· The Republican bill raises interest rates on parent loans to 8.5 percent. It also requires student and parent borrowers to continue paying excessive, above-market interest rates on their loans in many cases.
· The bill eliminates $2.2 billion in critical funds with which the Department of Education uses to administer and deliver federal student aid. Without these funds, the timely and safe delivery of federal student aid is in jeopardy..
· The bill requires lenders to either collect a 1 percent "insurance fee" from borrowers on all college loans, or to raise this fee from other non-federal sources. The most likely scenario is that college loan borrowers will wind up footing this bill.
Posted on: 1/7/2006 9:59:33 AM
by robdolin@wuxx.com
URL for more info: http://edworkforce.house.gov/democrats/109th/raidonstudentaid.html
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