Wednesday, October 7, 2009
A bill that would eliminate the Stafford Loan program has passed the U.S. House of Representatives and is set to go before the Senate. This means if you receive subsidized government loans — around a third of University of Kansas students — you will see your education costs increase by a few thousand dollars.
The legislation is supposed to save the government $80 billion over the next ten years. But $70 billion of that is already promised to be spent elsewhere, meaning an actual saving of $1 billion a year, or 1/300 of a percent of the federal budget. Not exactly the kind of savings that will end the budget deficit any time soon.
The other argument trotted out by proponents of the bill is that it will help students by increasing Pell Grants. This again fails on a number of levels.
First, far fewer students receive Pell Grants — about 10 percent of students at the University — meaning fewer people will see the benefits.
Moreover, the proposed increase is only $150 in the maximum amount of a Pell Grant, whereas the vast majority of recipients never receive the maximum amount anyway. If you’ve checked your tuition bills lately you know that, if you’re lucky, $150 might buy you one book.
Even if you hate politics (and justifiably so), odds are this legislation will affect you somehow. As someone who receives both Pell Grants and Stafford Loans, I can say that the loans have helped me far more. I would not be willing to pay thousands more in loans to see my grant go up a tiny bit.
I strongly encourage anyone interested in this bill to look into the student organization Higher Education for Lower Prices, write your Senator or talk to your friends about it. Do anything really. But do something, because as awful as politics often are, it’s worse to simply complain about them and then do nothing to help solve the problem.
— Alexander King is a senior from Wichita.
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Comments
Letter to editor: Can't cut student loans
I don't know if you are confused, but as I understand it the Stafford Loan program would not be eliminated by HR 3221 (I assume that is the bill you refer to, because you never mention the name of it and it's the only ED bill that comes anywhere close to what you are talking about), the FFEL program is being ended. That is the program where companies are permitted to lend Stafford Loans. That's going away, the Department of Education will be the only Stafford lender, and will no longer be permitting FFELs that they have to guarantee. That's good, because what WAS happening sucked (If you defaulted while it was with the original lender, your interest was capitalized. It was then transferred to a guarantee agency who paid the total amount of the loan to the original lender, and began collecting. If they were unable to collect, they would capitalize the interest that had accrued since the transfer, and sell it to the Department of Education.) and created a lot of waste and hurt student borrowers. You won't get less money. Your school costs will still go up, because that's what they've been doing for the past half century, but it has nothing to do with HR 3221, and if you're just talking about out of pocket costs they aren't affected by this. If you are somehow talking about an elimination of SUBSIDIZED Stafford Loans, I haven't seen anyone suggesting that, except Brandon Sayers when I talked to him a few weeks ago, before I bothered to even look at the bill summary. Now, maybe I can't read good, but that's what I got out of the HR 3321 summary, so if you're referring to another bill, or you got your information secondhand, or you saw a particular section claim that there would be a decrease in loan amounts, please let me know.
I think this comment may be too long.
Letter to editor: Can't cut student loans
Okay, so I just talked to Brandon and he said he got that impression from talking with Nancy Pelosi and George Miller. I called Miller's office and eventually talked to someone who said that the only change was from the FFELP to the DLP which just means the lender changes. There will still be subsidized and unsubsidized Stafford loans. The Perkins loans will no longer be subsidized, but that's a horse of a different color. You may uncircle the wagons.
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