Secretary of Education Arne Duncan and Director of the Domestic Policy Melody Barnes discussed the Student Aid and Fiscal Responsibility Act (SAFRA) in a Web chat Tuesday.
President Barack Obama initiated the bill in hopes that the U.S. will have the highest college graduation rate in the world by 2020 by making higher education more affordable.
The act is designed to increase college affordability and accessibility without using taxpayers’ money. It aims to change the operation of student loans, strengthen community colleges and overall provide more money and resources to high schools and elementary schools nationwide. Already passed in the House last September, the act now awaits action in the Senate.
“This is a once-in-a-lifetime opportunity,” Duncan said. “It is simply the right thing to do [for students].”
SAFRA will help financial aid candidates by lowering interest rates on subsidized loans and make financial aid applications less confusing and more simple by removing questions that have little or no impact on loan eligibility.
The lowering of interest rates will be done mainly by switching student loans from subsidized to direct loans, which would save $80 billion a year, according to Duncan. The U.S. Treasury would originate the loans instead of banks, making interest rates more affordable.
The act will also increase Pell Grants and federal Perkins loans by providing funds to help them grow faster than the rate of inflation per year, which will drive interest rates down further.
SAFRA will invest $10 billion into the community college system in order to jumpstart college careers.
“Community colleges have never been so important to higher education,” Duncan said.
Duncan said that brainstormers for SAFRA are also trying to push the notion of reducing the price of textbooks at both the community college and university levels.
Cleo Gordon, a junior journalism major, said she likes the proposed legislation. She has student loans that will eventually need to be paid off.
“Anything that allows people to get a higher education is a good thing,” Gordon said, “especially with the lower interest rates because I know people who shy away from college opportunities because of the cost.”
Radiation therapy student Alysha Wortman had a different view on the proposal.
“It’s about time the government did something,” Wortman said. “Why don’t they do us all a favor and make education free?”