Can the government look at the loans that Citibank, Bank of America and Wells Fargo give to college students and say, “This is bullshit?” Yes they can.
The Obama administration has done it again. In a move projected to save more than $80 billion over 10 years, the House of Representatives passed the Student Aid and Fiscal Responsibility Act last week.
The bill, if passed by the Senate, essentially takes power away from greedy lenders and puts more financial aid in the hands of low-income students. The impacts would be felt almost immediately, with federal Pell grants jumping from the current $5,350 per year to $5,550 in 2010 and increasing incrementally to $6,900 by 2019.
A critical part of the legislation would be — beginning in 2011 — to link it to the cost of living plus 1 percent, as measured by the Consumer Price Index. This aspect is critical as college tuitions and fees have unrealistically outpaced the cost of living, especially in states like California.
Fees within the California State University system have far more than doubled during the past decade and promise to climb higher during the next couple of years.
Obama promised students back in November that a change in higher education was coming as he promised to help the helpless. That is exactly what is being done with this bill, written by the chairman of the House Education and Labor Committee, George Miller. Shifting the loans from private lenders to direct federal lending, according to the Los Angeles Times, will save a total of $87 billion dollars.
The law promises to give about $8 billion dollars toward building more K-12 schools, as well as another $10 billion in funding for community colleges, which would include money for both work force training and construction projects. More than $2.5 billion dollars would be allocated to funding historically black colleges and universities.
Other provisions of the bill would put more muscle into the Perkins Loan program and reduce the number of confusing questions on the Free Application for Federal Student Aid.
Republican naysayers, who call the measure a “massive entitlement spending spree,” should appreciate that somebody is doing something proactive. It’s clear that if we rely on conservatives to step beyond partisan bickering, nothing positive will happen.
Let’s face it, conservative lawmakers just aren’t innovative. Their only strategy seems to be maintaining the status quo of widespread poverty, rather than investing in future generations through improving education.
Tens of millions of students would benefit from this new law, but conservatives would prefer to protect a few greedy corporate banking systems. Go figure.
Obama has attempted to make a lot of changes these past months, but his attempts have been welcomed with hostility. Republicans have already lumped the student aid legislation with Obama’s health care reform in order to create fear.
It is very confusing as to why people cannot understand that, during the past year, the plummet of banks, credit card companies, the auto industry and investment corporations caused enough public anxiety and pain to last a lifetime.
Making things right by passing more student-friendly legislation is a start. The only way to do that is to guarantee sound funding for education.