Gregg Says He is Disappointed by House Student Loan Reform Bill
COLLEGE
New Hampshire Union Leader
Daisy Hsiang-Ching Tseng
Boston University Washington News Service
Sept. 15, 2009
WASHINGTON—Education Secretary Arne Duncan urged the House Tuesday to pass the Student Aid and Fiscal Responsibility Act, saying that it could help millions of college students at no new cost to taxpayers.
Duncan spoke at a press conference with House Education and Labor Committee chairman George Miller, D-Calif., and other lawmakers, including Rep. Carol Shea-Porter, D-N.H.
The House is expected to vote on the bill Thursday.
Students from Brown University, the University of Michigan, the University of Maryland, the University of Massachusetts and the University of Arizona wearing their school shirts came to the press conference to show their support for the bill and to display signs that read, “Subsidize students, not banks!” “I can’t pay for college” and “Students over banks!”
Miller said that according to the Congressional Budget Office, the bill would not only make college more affordable but would also pay down the deficit, saving $87 billion over 10 years.
“It’s a win-win,” Miller said, “for students, families and employers.”
Duncan said the legislation would not only reduce students’ college debt, but would also improve the graduation rate. He expressed hope financial problems would no longer be a factor in going to and completing college.
“It’s not just about access,” Duncan said. “It’s about completion.”
Sen. Judd Gregg, R-N.H., said in a statement he recognized the importance of giving students the opportunity to receive a college education. But he said he worried that these opportunities could come at the expense of future generations of students.
“I am disappointed that those in the House have chosen to use false savings and budget gimmickry to expand and create new entitlement programs, while removing competition and choice for students in colleges across the nation.” Gregg said. “This sort of action represents a nationalization of the student loan program which will unfortunately result in less access and more bureaucracy for students, families and colleges. At a time when our nation’s debt is threatening to bankrupt our country, it is unconscionable to create additional, costly, big-government programs.”
The Senate version of the student loan reform bill has not yet come out of the Health, Education, Labor and Pensions Committee, on which Gregg is a senior member.
Shea-Porter said she felt confident that the House would pass the bill on Thursday. She said the bill represented a bipartisan effort and that House members recognize the difficulties many middle-class families are facing in sending their children to college.
“Families will see relief very soon after this bill is passed,” she said in an interview.
The legislation would authorize spending $40 billion to increase the maximum annual Pell Grant scholarships to $5,550 in 2010 and to $6,900 by 2019, and an additional $3 billion to bolster college access and completion support programs. It would also keep interest rates low on college loans.
The money for the program would come from the subsidies the federal government has been giving to banks and private lender, according to Shea-Porter.
The bill would replace the Federal Family Education Loan program with direct federal loans. Beginning next July, all new federal student loans would originate under the Federal Direct Loan Program, which is insulated from market swings and therefore can guarantee access to low-cost federal college loans, the Education Committee Web site says.
The bill is intended to foster competition among lenders by allowing private companies to compete for bids to service these loans, ensuring that contracts are given to lenders who offer better customer service, its sponsors say.
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