Archive for Friday, November 4, 2005

Senate reworks financial aid

Overhaul of federal programs may cost students thousands more

November 4, 2005


A major overhaul of federal student loan programs could force students and families to pay thousands of more dollars for their education in the future.

"It's a very bad thing for students who are already struggling to pay for loans and college," said Josh Bender, a Kansas University student and legislative director for the Student Senate.

The changes are part of a budget reconciliation measure covering dozens of programs that is moving through Congress. The U.S. Senate on Thursday narrowly approved a bill with a 52-47 vote. Also on Thursday, the House Budget Committee passed a $54 billion deficit reduction bill by a party-line vote.

An estimated 11,000 KU students, including those on KU's Edwards Campus, would be affected, according to KU's Student Financial Aid Office.

The plan would raise student loan interest rates and fees. Starting next year, it could add more than $5,000 to the cost of getting an undergraduate degree, according to the United States Student Assn.

The interest rate parents pay for the so-called Federal PLUS loan is 6.1 percent. The Senate plan, for example, calls for raising that to 8.5 percent.

Bender said KU students have written hundreds of letters to politicians and tried to spread awareness of the issue.

"There's a lot of things that are going to hurt students in the long run with this," Bender said.

The Senate bill, which includes cuts to several so-called mandatory programs, could trim more than $30 billion from budget deficits of $1.6 trillion over five years.

Republicans said the debate marked an important moment for their party, which gained control of Congress 11 years ago with promises to balance the budget.

The House bill, which also includes the hotly debated provision for Arctic oil drilling, may be reworked before a final floor vote next week.

U.S. Rep. Dennis Moore, a Democrat whose 3rd District covers parts of eastern Lawrence, said the proposals shortchanged young people.

Moore said the cuts, including slashes in Medicaid, were needed to offset the costs of a pending $70 billion tax cut and Hurricane Katrina relief.

"To me, it's just wrong when we try to pay for tax cuts and catastrophes like Katrina by cutting back on the people who need it the most," he said.

According to a report by the New America Foundation, a nonprofit public policy institute, the government creates "savings" - in both the House and Senate proposals - through collecting more money from students, parents, and lenders. The report said changes to the federal student loan program were the single largest source of "savings" in the budget reconciliation process.

Chris Cardinal, a KU senior and head of the Kansas Public Interest Research Group, said he has federal loans. If the changes are made, Cardinal said he wouldn't be able to give back to the economy and the community what he otherwise could when he graduated.

"The federal government is supposed to be here to help us and put education as a higher priority than some of the other things that are going on," he said.

- The Associated Press contributed to this report.


just_another_bozo_on_this_bus 12 years, 6 months ago

This is, in effect, a tax increase. It's directed at middle- and lower-income students, and it transfers the tax liability formerly borne by wealthy taxpayers who got the bulk of BushCo's tax cuts. Another word for this is class warfare.

moveforward 12 years, 6 months ago

The elements responsible for creating wealth and prosperity in America over the last 100 years are innovation and entrepreneurship. These two elements have added more jobs and provided more prosperity than all other factors combined. To add barriers to education in this day of expanding globalization is a critical mistake. Our children deserve better, and it should be our charge to provide a promising future. This is so misguided and so short sided.

cowboy 12 years, 6 months ago

yet another in a series of multi front attacks on the ability of middle and lower class kids to get an education. While the schools raise tuitions in percentages three times the inflation rate the government adds a whammy of higher rates. This is just another example of the absolute meanne3ss of the republican leadership. They must be stopped in 2006 and all should have a long memory of the arrogance , heartlessness and damage they have done to this country in a very short period.

Another chapter of the systematic transfer / theft of wealth to the richest entities of the country.

Jamesaust 12 years, 6 months ago

Hmmm....the 2005 budget deficit is approximately $318,620,000,000. The adjustment to the method for calculating interest will reduce federal outlays by a few billion out of the larger budgetary bill referenced here (that removes about 39 billion -- and even that is only over multiple years!!).

That anyone would think that finding an extra $300b could be done without any adjustment to middle class welfare only serves to draw attention to the ignorance most persons seem to operate under whenever these subjects are addressed (let alone the combination of budgets and very large numbers).

Let's keep in mind that the "cuts" involve asking aid recipients to pay a more realistic rate of interest on the principal. Considering that most economists would claim that large deficits over time raise the market rates of interest, it seems that those affected can pay here or pay indirectly over their life times.

Indeed, its probably a fair guess that the lifetime value of a college education probably increases by $5,000 per year. I guess the proof will come when supposedly rational, self-interest consumers of education (that is, students) choose whether pursuing college is financially worthwhile or not. I suspect that even with these quite minor adjustments they will vote with their feet and continue to enroll in record numbers. (Then they can graduate, find good paying jobs, and suddenly change their political outlook when they see how (ever increasing) much of their incomes the government seems to "need".)

Godot 12 years, 6 months ago

As usual, the LJW and the AP don't tell the whole story. There is a lot of very good stuff in this bill.

Check it out for yourself.|/bss/d109query.html|

hottruckinmama 12 years, 6 months ago

par for the damn course for this president. glad my boys will be attending vo-tech.

Godot 12 years, 6 months ago

Okay, so don't take the time to inform yourself. If you did, you would know that this bill expands pell grants, makes it easier to qualify for aid, makes distance learning eligible for grants and aid, provides for outreach and benefits for migrant workers and homeless, relaxes restrictions, expands aid to students who go into nursing, teaching, medicine, and much more. But, go ahead, just like you are. Just believe what the press feeds you. Live in blissful ignorance.

No doubt, the higher ed community wants you to be up in arms about this bill because it requires accountability and measurable progress on the part of the institutions themselves.

born1980 12 years, 6 months ago

I'm all for cuts across the board. But as a Republican, the priorities of the administration are absurd. This President is a big government conservative, if there is such a thing. It looks pretty short-sided when you focus on the most vital social areas for cuts, yet corporate welfare and incentives for business to leave this country continue unchecked. Everyone should sacrifice, but with the record profits Exxon Mobil just announced I think they could afford to sacrifice more then a college student.

Commenting has been disabled for this item.