One of the proposals the committee will examine is President Obama’s FY 2010 budget proposal, which would increase the Pell Grant scholarship and other forms of student aid by almost $100 billion over ten years – and at no cost to taxpayers. The President’s plan would be paid for by ending the subsidies the federal government currently pays to lenders in the federally-guaranteed student loan programs and re-directing those savings back into additional aid for low- and middle-income students
Higher Education
Key Legislation:
The Ensuring Continued Access to Student Loans Act of 2008 »
Higher Education Opportunity Act of 2008 »
College Cost Reduction and Access Act »
Student Loan Scandal »
College Student Relief Act »
One of the proposals the committee will examine is President Obama’s FY 2010 budget proposal, which would increase the Pell Grant scholarship and other forms of student aid by almost $100 billion over ten years – and at no cost to taxpayers. The President’s plan would be paid for by ending the subsidies the federal government currently pays to lenders in the federally-guaranteed student loan programs and re-directing those savings back into additional aid for low- and middle-income students
One of the proposals the committee will examine is President Obama’s FY 2010 budget proposal, which would increase the Pell Grant scholarship and other forms of student aid by almost $100 billion over ten years – and at no cost to taxpayers. The President’s plan would be paid for by ending the subsidies the federal government currently pays to lenders in the federally-guaranteed student loan programs and re-directing those savings back into additional aid for low- and middle-income students.
WHAT:
Hearing on “Increasing Student Aid through Loan Reform”
WHO:
Witnesses TBA
WHEN:
Thursday, May 21, 2009
10:00 a.m. ET
Please check the Committee schedule for potential updates »
WHERE:
House Education and Labor Committee Hearing Room
2175 Rayburn House Office Building
Washington, D.C.
The benefits were established under the College Cost Reduction and Access Act, a law Congress enacted in 2007 that provided an additional $20 billion in federal student aid for students at no additional cost to taxpayers.
This year’s class of graduating college seniors also enters one of the toughest jobs markets in decades for recent graduates. Of the 1.2 million jobs lost last year, 60 percent were held by workers aged 25 or younger. Their wages may also suffer: Economists have found that workers who graduated during recessions typically earn less over a lifetime than workers who graduate in better economic times. Many borrowers already spend high percentages of their paychecks making student loan payments – and it’s only likely to get worse.
Given these challenges, it’s critical for current college students, new or soon-to-be graduates, and workers to know about new benefits going into effect July 1 that will make student loan payments manageable for millions of Americans. (These benefits were signed into law in 2007 as part of the College Cost Reduction and Access Act.) They include:
“As we continue working to turn our economy around, we have to do everything we can to help the millions of Americans who have suffered job losses in this recession get the education, training and skills they need to return to the workforce. President Obama’s initiatives are commonsense steps that will make college and training programs more accessible and affordable for laid-off workers by allowing them to enroll in postsecondary education without forfeiting their unemployment benefits. In addition, it’s critical that he reminded financial aid officers that they can adjust financial aid packages based on recent layoffs, so families aren’t paying for college based on incomes they no longer earn.
Currently, people who are out of work and want to go back to school have to give up their monthly unemployment check. And if they decide to return to school, they often don't qualify for federal grants because eligibility is based upon the previous year's income.In addition to making it easier for those out of work to return for additional training, President Obama has been pushing for a transformation of the federal loan program to save taxpayers money and ensure stability for students. This USA Today editorial explains why this reform is important.
The student lending market is far smaller than the housing market. But it raises a similar question: Does it make sense for the government to pump its education dollars through banks — which divert some of the money for their own profits, wine and dine college financial aid officers to get on "preferred lender" lists, and lobby Washington to keep the spigot open?
The administration estimates it can save as much as $94 billion over 10 years by eliminating middlemen and lending directly. Even if that number is exaggerated, it reflects how inefficiently taxpayers' money is being spent. Banks shouldn't need major subsidies to issue guaranteed student loans.
To learn more about President Obama's proposal click here.
While Brennan’s situation, and the remedy he is pursuing, may sound extremely ambitious, guidance counselors across the country say they can recall no prior year in which so many applicants’ families have been squeezed by so many financial pressures.President Obama has put forth a solid plan to make federal student loans more reliable, while saving taxpayers billions of dollars. To learn about the President's proposal, click here.
Not only have families’ incomes been falling as their savings have dwindled, but also tuition has been rising — including proposed increases of nearly 10 percent next year throughout the University of California system....Interest rates on student loans, including on popular federal programs like the unsubsidized Stafford (now nearly 7 percent) and Parent Plus (8.5 percent), are running several percentage points higher than the rates on secured loans, like home equity lines of credit.
“The difference of rates between secured and unsecured loans is higher than I have ever seen,” said Scott White, director of counseling services at Westfield High School in New Jersey. “This is one further impediment to access to post-secondary education for all but the well-to-do.”
Will Congress pass Obama's student loan plan?
This proposal would not threaten private lenders' ability to make private loans to college students at unregulated (and often highly profitable) interest rates. It would simply allow the federal government to keep the profits from loans it already subsidizes, instead of handing them over to banks. It would improve efficiency and save money, and it should have been passed a long time ago.
And there is more at the San Francisco Chronicle and we encourage you to read the entire editorial.
To learn more about where Chairman Miller stands on this proposal, see his statement on President Obama's budget.
Private companies that reap undeserved profits from the federal student-loan program are gearing up to kill a White House plan that would get them off the dole and redirect the savings to federal scholarships for the needy. Instead of knuckling under to the powerful lending lobby, as it has so often done in the past, Congress needs to finally put the taxpayers’ interests first. That means embracing President Obama’s plan.
This builds upon Rep. Miller and the Education and Labor Committee's efforts in the 110th Congress.
We encourage you to read the entire editorial. And these from the Syracuse Post-Standard and the Albany Times Union.
CNN Money has an article about how specific provisions in the College Cost Reduction Act of 2007 can help recent graduates.
Under the College Cost Reduction and Access Act of 2007, two federal loan forgiveness programs could provide greater assistance to those who decide to pursue careers that serve the public. Income-Based Repayment (IBR) and Public Service Loan Forgiveness (PSLF) could make student loan forgiveness much more accessible to the masses.We encourage you to read the entire article to learn more about the two provisions, as well as visit the Department of Labor's website for the IBR and PSLF provisions.
"Both of these programs are much more widely available than anything that's been available in the past," says Irons.
The budget rightly calls for phasing out the wasteful and all-too-corruptible portion of the student program that relies on private lenders. And it calls for expanding the less-expensive and more-efficient program that allows students to borrow directly from the federal government. That means doing away with the Federal Family Education Loan Program, under which private lenders receive unnecessary subsidies to make risk-free student loans that are guaranteed by taxpayers.
This builds upon Rep. Miller and the Education and Labor Committee's efforts in the 110th Congress.
We encourage you to read the entire editorial.
A well-trained, college-educated workforce is key to a strong American economy and middle class. The economic crisis, combined with rising tuition prices and declining state support for higher education, threatens to put college out of reach for many students – forcing them to take a semester off or even skip college. Allowing students to be priced out of a college education will only further weaken our workforce and our economy. Economists, the business community, scientists and others agree that making strategic investments in education is a smart move to grow our economy and regain our competitive edge in the 21st century global economy.
The American Recovery and Reinvestment Act will help college students and families pay for college by significantly boosting federal student aid. It builds on the groundwork laid by the 110th Congress to make college more affordable and accessible for all qualified students. The legislation will:
WASHINGTON D.C. – U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee, issued the following statement today after U.S. Treasury Secretary Henry Paulson announced a new plan to bolster consumer lending, including student loans. The plan would allow investors to obtain a loan from the Federal Reserve, using student-loan and other asset-backed securities as collateral, potentially providing more funding to lenders to extend consumer credit.
A report released by the National Math Panel in March found that the nation’s system for teaching math is “broken and must be fixed” if the U.S. wants to maintain its competitive edge. In May, the Committee first examined the report’s findings and recommendations; this hearing follows up on that hearing.