The U.S. House of Representatives has finally done what it should have a long time ago.
Last week, members approved legislation that could end subsidies to private lenders who fund college loans. This action could save taxpayers close to $100 billion in the next 10-15 years. If the bill becomes law, the government would take over for lenders who have created debt for millions of students.
The Houston Chronicle reported Sunday that some of the tax savings would be spent on improving pre-school programs, supporting community colleges and modernizing public schools.
The best part is what happens to Pell Grants over the next decade: about $40 billion would be invested in the federal government’s largest scholarship program. The grant, mainly intended for financially disadvantaged students, does not have to be repaid, so making it a better option than a loan.
Those who assume Pell Grants will need to keep up with inflation will be happy to know that the maximum scholarship of $5,350 per student would eventually climb to $6,900 in 2019.
As the economy struggles to bounce back, more students are opting to attend college. UH, UH-Downtown, Rice and Baylor are just a few of the universities that are seeing record enrollment this fall.’
This bill would offer more opportunities to current and future students.
The sad part is how long it took our government to pass this bill. Although some Democrats have backed this legislation for years, the banks still had enough support to continue the lending system.’
The economic downturn has put several banks at the mercy of the government, so the Democrat-controlled House was able to push this legislation through to the Senate. The House deserves a round of applause, but we still need the Senate and President Barack Obama to pass this bill as soon as possible.
This legislation says private lenders should not make money off programs that are intended to offer financial assistance to disadvantaged students. Of course, the message delivers too little, too many years late.
