Spring Break
Financial Aid Faces Major Cut
Bill, If Passed, Would Lead To Largest Federal Cut Ever
Seth Harris
Issue date: 10/26/05 Section: News
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If the Republican-supported bill [H.R. 609] passes, typical student borrowers might have to pay $5,800 more than the existing average education debt of $17,500.
The cuts would mostly impact low-income students nationwide who already fall short by $3,800 each year when paying for college with financial aid, according to a memorandum by Rep. George Miller (D-Calif.), the senior Democratic member of the House Education and the Workforce Committee who is leading the fight against H.R. 609.
"There is no reason students should look at a college education and say they can't go because they can't afford it," said Tom Kiley, a spokesman for Miller's office.
The Republican proposals eliminate billion-dollar subsidies paid by the federal government to large banks and lending institutions in the student loan industry. The bill will also hold institutions accountable for their rising tuition costs by disclosing more information to the public and federal government.
According to a College Board report released last week, tuition at four-year colleges increased by 7.1 percent in 2004-2005.
"The committee has developed comprehensive reforms that will expand college access for low and middle-income students," said Education and the Workforce Committee Chairman John Boehner (R-Ohio) in a press release.
Democrats say the savings from subsidies are not going to students.
"[Republicans] are taking the savings and putting them into tax cuts for the rich or budget mess instead of making college more affordable," Kiley said.
Director of the UConn Division of Enrollment Management, Jean D. Main, said the largest impact at UConn would be on the Federal Family Education Loan Program School (FFELP). The rate of students defaulting on these loans could increase.
According to the most recent publication of default statistics, in 2003 UConn had a 1.6 percent default rate, much lower than the national average of 4.5 percent.