David McRaney  |  Journalist

Financial aid faces major cuts

On Nov. 18, the House of Representatives approved a bill cutting $50 billion in federal spending, including a $14.3 billion cut to federal student financial aid programs.

If the House bill becomes law, students would be forced to pay as much as $5,800 more in college loans as early as July 1, 2006.

"Rather than work to build a better, stronger America for future generations, they chose to cut our national commitment to a college education for every qualified student," said Rep. George Miller of California, the senior Democrat on the House Education and the Workforce Committee, who has been leading the opposition to what many students are calling the "Republicans' Raid on Student Aid."

"Mark down this day, when Washington republicans voted for the biggest cut in the history of federal student aid programs," added Miller.

The divisive bill passed by only two votes - 217 to 215 - with 200 Democrats, one Independent, and 14 Republicans opposing it. All 217 votes in favor of the bill were cast by republican lawmakers.

"The Senate reconciliation cuts $21 billion from student loan programs recycles about half of the cuts into new funding programs," said Legislative Director of the United States Student Association, Jasmine O. Harris, "but ultimately cuts $9.7 billion out of the program to pay for tax cuts for the wealthiest Americans."

Harris added that she believes the step is educating students about how they can get involved and make a difference.

Students have been instrumental in voicing their concerns and raising awareness around the country about the proposed cuts, said Harris. "Congress originally planned to take action in mid-September, but the response of students and concerned citizens toward these cuts have delayed congressional action."

Luke Swarthout, organizer of the State Public Interest Research Groups' Higher Education Project, is also urging students to speak out.

"The House could vote against the budget reconciliation bill tomorrow, that would end these cuts," he said.

Swarthout explained, "At the heart of the student loan reconciliation cuts are higher interest rates and new fees for borrowers."

According to Swarthout, the bill will increase the interest rate cap for student loans from 6.8 percent to 8.25 percent. For parent borrowers, the bill increases the interest rate cap from 7.9 percent to 9.0 percent. In addition, the bill will make loan consolidation significantly more expensive by charging a new 1 percent tax on all students and parents choosing to consolidate their loans.

"According to a recent analysis by the Congressional Budget Office, these rate hikes and fees will create $7.8 billion in new charges to student and parent borrowers over the next five years. Budget Reconciliation will make higher education less affordable for millions of families," he added.

The next step, according to Swarthout, will see the House and Senate meet to combine their bills. After that point, the House and Senate will be asked to vote again on the final bill.

He added the House and Senate proposals are significantly different, so conferencing them together will be a challenge.

"Students can play a critical role in stopping reconciliation by pressuring their representatives not to support the final reconciliation package," said Swarthout.

Students can call 1-800-574-4243 to be connected to the Capitol switchboard to have their opinion heard, or they can visit www.studentaidaction.com

Originally published in The Student Printz on November 29, 2005