Congress Loosens Student Aid Funding - Southern Maryland Headline News

Congress Loosens Student Aid Funding

By ROB TRICCHINELLI, Capital News Service

WASHINGTON (Sept. 13, 2007) - Congress passed legislation last Friday to increase grant money for college students and lower interest rates on student loans, which supporters say will create better access to higher education for students in Maryland.

"This legislation offers good news for students who want access to an education and the freedom to achieve the American dream," said U.S. Sen. Barbara A. Mikulski, D-Md., in a statement.

The Senate passed H.R. 2669, The College Cost Reduction and Access Act, by a 79-12 vote, while the House of Representatives approved it 292-97.

Mikulski was involved in drafting the legislation, which increases available student aid by cutting $20 billion from government subsidies to lenders.

It also increases the Pell Grant maximum from $4,310 to $5,400 by 2012 and halves the interest rate on student loans—from 6.8 percent to 3.4 percent.

"This is the first opportunity in years to put together and craft a comprehensive higher education bill," said Melissa Schwartz, a spokeswoman for Mikulski.

The legislation was a "No. 1 priority" of the Health, Education, Labor and Pensions Committee, of which Mikulski is a senior member, Schwartz said.

"This is absolutely one of the most important pieces of legislation to come out of this Congress," said Andrew Friedson, student body president at the University of Maryland, College Park.

Friedson lobbied for the bill, appeared at news conferences with its sponsors and led a delegation of students to attend related hearings.

"It's a crucial first step," he said. "We need to continue to look at ways to make college more affordable, especially at the state level."

In Maryland, tuition rates have risen in recent years. At the University of Maryland, College Park, tuition in 2002 for full-time undergraduate in-state students was $4,572, and $13,336 for out-of-state students.

For 2008, in-state students will pay $6,566 and out-of-state students $20,805—a more than 40 percent increase in that period.

President Bush is expected to sign the legislation, the U.S. Department of Education said Thursday. The White House had threatened a veto in a July statement.

The bill's supporters said it will increase access to college for needy students and will make higher education generally more affordable.

"It's something that's long overdue," said Stephanie Johnson, director of financial aid at the University of Maryland Baltimore County. "Our students do rely heavily on loans, and it will obviously help our Pell Grant recipients.

"It's all excellent," she added.

The legislation also offers loan forgiveness to borrowers who go into public service jobs—including public education, health care or law enforcement—and limits monthly loan payments based on a graduate's earned income.

Friedson said the subsidy cuts were important and that the lending companies have "a real sweetheart deal."

Not all reaction to the legislation was positive.

"We believe that the cuts are too deep and go too far," said Shelly Repp, a spokesman for the National Council of Higher Education Loan Programs. "They will affect the student loan program in substantial ways that are too early to identify in full."

The council wrote to Congress in August, along with other lobbying organizations, saying the legislation brought "unacceptable levels of uncertainty."

Proponents said the bill will ease the long-term burden on college students who borrow money.

"A reduction in student loan debt is always welcome," said Vincent Pecora, director of financial aid at Towson University. He called the legislation a "welcome, welcome increase," and added, "Pell Grants have fallen behind the increasing cost of education."

Towson has approximately 2,000 Pell Grant recipients among its more than 14,000 students.

"It certainly sounds like it's going to have a significant effect."

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