House Backs Big Changes in Student Aid Programs
By DIANA JEAN SCHEMO
The New York Times
July 11, 2007
WASHINGTON, July 11 — The House approved far-reaching changes in student aid programs today, voting to slash $19 billion in federal subsidies to student lenders, and use the savings to raise aid for needy students and cut in half the interest rates on federally backed loans.
The measure was approved 273 to 149, in a sometimes raucous debate, with 47 Republicans joining Democrats to assure its passage.
Democrats who took control of Congress this year had campaigned on promises to help the middle class with the escalating costs of higher education. The legislations signals a sea change for the student loan industry, which had largely enjoyed unflagging support under the Republican majority of the past decade.
Investigations by Congress, and the New York State attorney general’s office have also bruised the standing of lenders, exposing systems of paying colleges commissions to win business, offering college officials free trips and other perks.
While President Bush opposes some elements of the House bill, it is widely expected that a broad overhaul of student aid will become law this year. Mr. Bush himself has proposed slashing government subsidies to lenders by some $16 billion. The Senate is expected to pass similar legislation later this month.
Citing increases in the cost of attending college over the last five years that outpaced inflation by 35 to 40 percent, Representative George Miller, the California Democrat who is chairman of the House education committee, likened the legislation to the G.I. bill of 1944, which began government financing of higher education in exchange for military service.
“That took us to the first place in the world, and we’ve been there for 50 years,” Mr. Miller said. “This is about a new investment for the next generation.”
Republicans decried the bill as creating a panoply of nine new entitlement programs, which they branded “welfare programs,” complaining that it represented free-wheeling spending by Democrats. They offered a substitute that would have largely focused on increasing Pell grants for needy students, without cutting interest rates. The substitute was defeated 231 to 189, in a largely party-line vote.
The New York Times
July 11, 2007
WASHINGTON, July 11 — The House approved far-reaching changes in student aid programs today, voting to slash $19 billion in federal subsidies to student lenders, and use the savings to raise aid for needy students and cut in half the interest rates on federally backed loans.
The measure was approved 273 to 149, in a sometimes raucous debate, with 47 Republicans joining Democrats to assure its passage.
Democrats who took control of Congress this year had campaigned on promises to help the middle class with the escalating costs of higher education. The legislations signals a sea change for the student loan industry, which had largely enjoyed unflagging support under the Republican majority of the past decade.
Investigations by Congress, and the New York State attorney general’s office have also bruised the standing of lenders, exposing systems of paying colleges commissions to win business, offering college officials free trips and other perks.
While President Bush opposes some elements of the House bill, it is widely expected that a broad overhaul of student aid will become law this year. Mr. Bush himself has proposed slashing government subsidies to lenders by some $16 billion. The Senate is expected to pass similar legislation later this month.
Citing increases in the cost of attending college over the last five years that outpaced inflation by 35 to 40 percent, Representative George Miller, the California Democrat who is chairman of the House education committee, likened the legislation to the G.I. bill of 1944, which began government financing of higher education in exchange for military service.
“That took us to the first place in the world, and we’ve been there for 50 years,” Mr. Miller said. “This is about a new investment for the next generation.”
Republicans decried the bill as creating a panoply of nine new entitlement programs, which they branded “welfare programs,” complaining that it represented free-wheeling spending by Democrats. They offered a substitute that would have largely focused on increasing Pell grants for needy students, without cutting interest rates. The substitute was defeated 231 to 189, in a largely party-line vote.
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