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TexPIRG Higher Education Associate Rich Williams issued a statement on the student aid bill language released today by the leadership of the U.S. House of Representatives:
“TexPIRG applauds the House leadership under Speaker Nancy Pelosi and Education Chairman George Miller for unveiling the language of the reconciliation package that will make federal financial aid programs work for students. At a time when tens of millions of college students must assume crushing debt loads to fund their education, this legislative proposal will bring relief to those who might otherwise forgo or drop out of college.
“It streamlines the federal financial aid system to make investments in grants for the neediest students who face record student debt levels. The federal financial aid system is failing to help students of modest means gain access to college by forcing them to rely too much on loans to pay for it. This language renews the promise of higher education for the 8 million students using federal aid to go to college by bolstering the Pell grant. The investment will not only increase aid that doesn’t need to be repaid, thus decreasing the need to rely on loans, but it will also ensure that the grant level increases with inflation each year. In addition, the proposal eliminates much of the current shortfall in the Pell program, providing consistency in a time of economic uncertainty for millions of students relying on Pell aid right now.
“The student aid bill will also make a critical investment in programs to help more students make it to graduation. Paying for college is one obstacle, while completing a degree or certificate program represents a different challenge. The bill funds programs to incentivize the best practices in college access and completion across the country to help ensure that all undergraduates become graduates.
“Finally, the proposal makes student debt more manageable for borrowers by enhancing the federal Income Based Repayment program. Borrowers with lower salaries can enroll in the program to repay their loans based on what they make rather than what they owe. The proposal raises the income levels for borrowers to qualify for the program, as well as lowers the time frame in which the loan is forgiven from 25 years to 20 years.
“To achieve these investments, the legislation moves all federal student lending to the Direct Loan program. Direct lending works; the administrative costs are lower, the design is simpler and it eliminates subsidies to the private lending and banking industry. Direct lending is not just better for students, it is better for taxpayers, too.
“This legislation renews the promise of student aid programs for the tens of millions of students who rely on grants and loans to achieve a college education. The House of Representatives already voted once in support of this legislation in September; we urge another vote in support of college students and their families to pass this historic legislation.”
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