Students facing the high cost of higher education will soon get a break, as Congress continues to move forward with reforming the college loan process.
Right now, the federal government is paying huge subsidies to banks who make college loans to students, loans that are guaranteed by the federal government. The
Student Aid and Fiscal Responsibility Act.(HR3221) will wipe out those subsidies to private lenders and expand the direct loan program, under which the federal government itself loans the money through colleges and universities. The move will save taxpayers $90 billion over the next decade.
Rather than going into the pockets of bankers, $10 billion of that savings will go to reducing the federal deficit.
The rest will be used to expand college aid and education programs, including $40 billion for Pell Grants, reducing interest rates on need-based student loans, simplifying the loan application form for families, investing $1.2 billion in historically black colleges, funds for updating community college buildings, grants to encourage cooperation between community colleges and businesses, grants for developing on-line courses, grants to reform standards for early learning programs, and grants to loal school districts for modernizastion and repair.
Republicans oppose the measure, as The New York Times editorial notes.
We'll see if Rep. Mike Rogers, whose Eighth District includes Michigan State University, will vote with his GOP leadership or with the students who live in his district.