THE PENDULUM

by Jack Dodson, September 22, 2009

Last Thursday, the House of Representatives passed legislation that hopes to overhaul federal financial aid for students. The bill, penned by Rep. George Miller (D-Calif.), has already spurred politicians to polarize about its effectiveness.

The Student Aid and Fiscal Responsibility Act of 2009 seeks to improve financial aid in the following ways, according to Inside Higher Ed:

Provide $40 billion during the course of 10 years, increase the maximum Pell Grant to $5,500 as well as increase it annually by the rise in the Consumer Price Index.

"Greatly expand" and tweak the Perkins Loan Program.

Strengthen early childhood education with the backing of $8 billion in 10 years.

Give states and institutions incentive to increase college enrollment by creating a "College Access and Completion Fund" that would provide grants on the basis of innovative strategy for attracting students to postsecondary education.

Support the modernization and repair of school and college facilities with the help of $4.1 billion.

Simplify the federal financial aid form.

"Instead of the loans being made by banks and subsidized by the federal government, the government will be the lender and collect the loans and make money on the interest once students are in repayment," said Patrick Murphy, the director of financial planning at Elon.

While supporters suggest the bill is a landmark, one which a press release on the House's Committee on Education and Labor's Web site said will "make college dramatically more affordable for millions of Americans, at no new cost to taxpayers," there is not a sound chorus of appreciation coming from Washington, D.C.

"Republican leaders derided the legislation as a federal takeover of the student loan industry," the Inside Higher Ed article said.

A news release on the Web site said a Republican senior member of the House Committee on Education and Labor marks a clear split within the committee.

"(The bill) fulfills President Obama's call to abolish the Federal Family Education Loan program and replace it with a system of government-run lending directly from the U.S. Treasury," the release said.

The Christian Science Monitor reported the bill passed 253-171, which was mostly along party lines, sticking with the Congressional trend.

Murphy said the bill's savings are hard to calculate at this point.

"The claim is that there will be savings within the system because the government will not be paying subsidies to the commercial banks," he said. "There is discussion whether the savings will be as much as claimed. We won't know until it actually happens."