Last minute action kills“raid” on student aid

A contentious bill was killed by a 224-209 House vote on Nov.17, ditching a budget reconciliation proposal that included changes to the financial aid system used by college students nationwide.

Students and families were facing the prospect of higher debt burdens due to the added cost of financing their education.

The House Education and Workforce Committee launched an effort in October to pass the Republican proposal, seeking $14.5 billion in cuts from the student aid program.

Pell Grants, common in most financial aid packages, face pre-existing funding difficulties despite the bill’s defeat.

Republicans said the cuts would have allowed the House to meet its goal of finding $50 billion in savings to cover unanticipated expenditures.

A scheduled vote earlier in November was stricken from the schedule when it became clear the legislation faced a battle.

“Republican leadership pulled the bill due to lack of support,”said Rep. Eddie Bernice Johnson (D-TX), representative of the 30th District, where the Dallas County Community College District is based.

Conflicting priorities
This fiscal year the federal government has experienced a convergence of conflicting financial needs. Legislators admit that budget reconciliation is a means of meeting the challenges of funding hurricane relief, deficit cuts, tax breaks and other Administration priorities. Additional government spending can be circumvented by the proposed cuts, say some House members.

The bill’s defeat was preceded by rancorous debate.

“Student financial aid programs are not a slush fund for Congress to raid whenever it wants tax cuts for the wealthy, handouts for its corporate cronies, no-bid contracts for the well-connected, or pork for special interests,” said Rep. George Miller (D-CA) in a speech on the House floor following the bill’s introduction. Miller is the ranking Democrat on the committee.

A variety of systemic changes were designed to impact the process of borrowing money to for pay for college. One proposed change increased interest rate caps on student loans. The proposed bill would have raised the interest rate cap from 6.8 percent to 8.25 percent, which might have been offset by other procedural changes.

On average a student who relies on financial aid to attend college accumulates $17,500 in debt by graduation, and under the Republican’s proposal, students stood to pay an extra $5,800 in loan costs, say those who opposed the bill.

Long-term goal
Republican members of Congress say they need to make the financial aid system stronger by pruning outdated and inefficient practices from the system. Changes could have made the student loan process more efficient, balancing the finance costs attached to loans between lenders and borrowers, say House proponents who designed the budget reconciliation plan, which they floated on Oct. 25 and had to abandon on Nov. 17.

Twenty-two Republican members joined with Democrats to defeat the spending bill, which in total would have cost $142.5 billion.

The cuts to education, healthcare and labor programs were only part of the package and were intended to create savings. Some representatives said the future of the system itself was a concern.

“We need to secure the long-term future of the federal student loan programs, and we can only accomplish that by placing them on a more solid financial foundation,” said Rep. John A. Boehner (R-OH) upon release of the House Education and Workforce Committee’s proposal in October.

Democrats and some political analysts suggest the President’s low approval ratings and the loss of Tom Delay (R-TX) as House Majority Leader contribute to an apparent lack of unity among House Republicans, noting that previous legislation moved swiftly through congress.

One bill that preceded the failed budget reconciliation proposal ended 14 federal programs that the committee deemed duplicitous or which had unproven benefits. The eliminated programs include “Arts in Education,” “Women‘s Educational Equity,” “Literacy Programs for Prisoners” and other national programs previously funded by Congress.

Opponents claim that Republican cost-cutting took aim at programs essential to low-income Americans, such as Medicaid and student financial aid, while ignoring more obvious ways to carve savings out of the federal budget.

More loans in aid package
College and university administrators say that financial aid packages now contain more student loans than ever before. Grants, work-study and scholarships used to play a bigger role in paying for tuitions and fees, which have been trending upward every year.

Campuses across the country have come down hard against those who proposed the “raid on student aid,” a term first used by opposing House Democrats. Student government officials remain vigilant and many administrators say that $14.5 billion taken from higher education will negatively impact students and their families, making college less accessible.

“It is encouraging that many of my Republican colleagues stood up against this package that would have severely hurt millions of working families,” said Rep. Johnson about the legislation’s delay and ultimate failure.