House Representatives Passes Bill to Reform Student Loans
STUDENTS
Worcester Telegram & Gazette
Jessica Leving
Boston University Washington News Service
9/17/09
WASHINGTON—A bill that would overhaul the student loan market and effectively put the federal government in charge of student lending passed in the House of Representatives on Thursday.
The Student Aid and Fiscal Responsibility Act would convert all new federal student lending to the government-run Direct Loan program. In addition, the bill would increase the maximum annual Pell Grant scholarship, expand the Perkins Loan program, simplify the application process for federal student aid and boost support for community colleges, historically minority universities and low-income kindergartens.
U.S. Reps. James P. McGovern, D-Worcester, Richard E. Neal, D-Springfield, and John W. Olver, D-Amherst, all voted in favor of the bill, which passed 253-171.
“It’s a down payment on our future,” Mr. McGovern said in an interview in his office. “We’re starting to lose our competitive edge, and that should scare everyone. One way we can regain it is to provide more access to education.”
“This legislation saves the government nearly $90 billion by cutting out the middleman,” Mr. Olver said in a statement. “The bottom line is: do we want this money going to private lending companies, or to make college more affordable and accessible? To me, it’s a no-brainer.”
Mr. Neal said in a statement, “In western and central Massachusetts alone, tens of millions of dollars will be invested in higher education.”
Most colleges in the Worcester area said they heartily support the measure.
“I’m 100 percent in support of the bill,” said Lynne M. Myers, director of financial aid at the College of the Holy Cross, in an interview.
Ms. Meyers said the university already made the switch to the Direct Loan program two years ago.
“We went to that to make sure our students had a secure loan market,” she said. “Students are relying on private loans to help them meet higher education costs, and that is not sound financing. The federal government looking at this makes good sense.”
She also said she approves the push to simplify the Free Application for Federal Student Aid.
“As an aid administrator, any time we can move in the direction of simplicity is great,” she said. She called the application process “a hurdle” that is “more complicated than it needs to be.”
Mary Ellen Severance, director of the Office of financial assistance at Clark University, agreed. “Those of us in financial aid are always in favor of legislation that would help prevent some of the barriers that our students are presented with for private higher education,” Ms. Severance said.
She said Clark also has already made the switch to direct lending.
Quinsigamond Community College’s assistant vice president of enrollment management, Iris Godes, said she supported the bill, but was concerned about rumors that new Pell Grant regulations might cut loans to part-time students.
Ms. Godes said her institution was also already part of the Direct Loan program.
“We actually like it a lot,” she said. “It works well for our students.”
Ms. Godes added that she strongly supports simplification of the application process. “Especially for students that are first-generation college applicants, they get confused and frustrated,” she said. “If they can’t complete the process, they can’t get their financial aid.”
Linda Mularczyk, director of financial aid at Assumption College, showed less enthusiasm for the proposed changes.
She said there are questions on theapplication form “that our institution needs,” adding that Assumption College administrators might need to develop a supplemental form to replace the old questions.
“As far as direct lending, my only concern is that most students and families have received such excellent customer service from our current lenders,” Ms. Mularczyk added. “I hope that direct lending is able to provide the same support.”
Jack Carrozzo, a senior at Worcester Polytechnic Institute, said he was happy to see some changes to financial aid.
Mr. Carrozzo called the current system “quite a mess” and added that “dealing with it every year is quite a task.”
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