Bill may leave students loan-less

By Christine Won

The House of Representatives will vote on its reconciliation bill, which proposes to reduce federal spending by $54 billion.

If passed, the largest portion of federal savings, $14.3 billion, will come from federally subsidized student loan programs, said Christine Lindstrom, State Public Interest Research Group’s Higher Education Project director.

“This is the largest raid on student aid in the history of American higher education,” said Luke Swarthout, associate of State Public Interest Research Group’s Higher Education Project.

Students can have a significant impact on this political process, said Jasmine Harris, legislative director of the United States Student Association, in an online chat about potential cuts to student aid on CPNewsLink.com on Wednesday.

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

Last week the Senate passed S. 1932, the Deficit Reduction Omnibus Reconciliation Act of 2005 by a 52 to 47 vote. It proposed a $39 billion budget cut over five years, in which $9.7 billion would be cut from student loan programs.

“The House’s version of the reconciliation bill on the floor on Thursday is much worse than the bill the Senate passed,” Lindstrom said. “It takes a lot more money from the students.”

The average student borrower is already $17,500 in student loan debt. With the proposed budget cuts, the average college student borrower would pay an additional amount of up to $5,800 in interest payments, Swarthout said.

“It’s critical that Congressman Johnson hear from students of Champaign-Urbana that he cannot cut student loan programs,” Lindstrom said. “It’s important for Congress to know that students all over the country are watching.”

The bill faces opposition from more than just students and student advocates.

Some moderate Republicans opposed certain budget cuts and are displeased with the amount of budget cuts they believe the Senate will not pass, according to a report from National Association of Student Financial Aid Administrators.

“This plan accomplishes two very important goals: It preserves and expands critical student benefits while simultaneously generating savings in higher education by making programs more efficient and effective,” said U.S. House Education & the Workforce Committee Chairman John Boehner, R-Ohio, in his Oct. 26 press release. “We need to secure the long-term future of federal student loan programs, and we can only accomplish that by placing them on a more solid financial foundation.”

Democrats argued the budget plan would significantly increase the cost of student loans in the next five years.

“The Republican raid on student aid is picking the pockets of students,” said Rep. George Miller, D-Calif., in his Nov. 3 press release. “Included in these cuts are nearly $8 billion in new charges to students and families that will raise the cost of their college loans.”

Democrats have a better idea to increase college affordability without additional cost for taxpayers: cut wasteful subsidies to banks and lenders, Miller said in the press release.

“Congressman Johnson’s vote is critical based on several reasons: he’s a moderate Republican who has expressed a lot of concern about the impact these cuts will have on students,” Swarthout said. “His vote will be critical in deciding whether the largest cuts in student loan program history goes through.”

Phil Bloomer, press secretary for state Rep. Tim Johnson, R-15, said Congressman Johnson has previously voted against the bill proposing budget cuts last spring.

“This is an evolving process,” Bloomer said. “The congressman has not said how he’s going to vote on the reconciliation bill because we do not know what the final bill will propose.”

The congressman will consider the overall package and see where and how deep the budget cuts are. They weren’t sure if there was even going to be a decision made on Thursday because the votes will be a close call, Bloomer said.

“The bill is proposing changes that have potentially adverse affects on student options and access to higher education,” said Tom Hardy, executive director for University Relations, said in a phone interview. “If financing a college degree is going to become more difficult, that is of concern to us. Instead of finding savings in student loan programs, they should redirect those savings into funding for financial aid.”