Rise in student debt is driving action on the Hill
Tuesday's 95-to-0 Senate vote boosts financial aid for poor families.
from the July 26, 2007 edition
Page 2 of 3
"The system was in gridlock," says Barmak Nassirian, a spokesman for the American Association of Collegiate Registrars and Admissions Officers.
But the scandals coming out of the student-loan industry this year, as well as the Democrats' desire to move ahead with one of the issues they campaigned heavily on in 2006, helped push the Senate to take action, many observers say.
The Senate version of the HEA includes an increase in the maximum amount that can be awarded in a Pell Grant to $5,400 by 2012. The program provides financial aid for college to low-income families.
The bill also prohibits banks from giving gifts to college-aid officials – a practice that caused an uproar because banks were seen as trying to buy their way onto colleges' lists of preferred lenders.
The action came on the heels of a budget-reconciliation bill approved this past Friday in the Senate, which cut federal subsidies to banks and other private lenders to students by nearly $19.5 billion and diverted much of those funds to the Pell Grant and other financial-aid programs.
It also included debt assistance for college graduates in public-sector jobs, such as government, teaching, or social work, and capped monthly repayments of federal loan debt for low-income borrowers.
Pressure has been building on Congress to address financial aid as tuition costs have risen. The average annual cost of college this year at a four-year private institution is $22,218 and $5,836 for a public school, according to a report from the College Board, an association of colleges, universities, and other educational organizations. Both numbers represent around a 6 percent increase from last year's costs.
The HEA reauthorization required several compromises to win Senate approval. "It wasn't the bill I would have written," said Sen. Edward Kennedy (D) of Massachusetts and coauthor of the bill.
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