President Barack Obama’s goal for the nation to generate more college graduates may become a reality if the U.S. Senate passes the Student Aid and Fiscal Responsibility Act (SAFRA), which was passed by the House of Representatives in September.
The act would make education more affordable by changing how student loan programs function.
‘The bill will help restore America’s global leadership in higher education, paving the way for a stronger economy,’ Secretary of Education Arne Duncan said in a press release. ‘The bill ensures that more students who are willing to take responsibility for their education can go to college and earn a degree.’
According to the Committee on Education and Labor (CEL) in the House, $6 of every $10 used for federal student loan funds comes from taxpayers. However, the SAFRA operates at no cost to taxpayers, as it is subsidized at a minimal expense by the federal government rather than private lenders.
President Obama praised CEL Chairman George Miller’s education reform bill, the SAFRA, or H.R. 3221, in a July statement.
‘Chairman Miller and I are working to end the wasteful subsidies that are given to banks and private lenders for student loans,’ Obama said in the statement. ‘Instead, (Miller’s) legislation will make college more affordable by paying for annual increases in Pell Grants that keep pace with inflation. (His) legislation will also invest in high-quality early education that can save taxpayers several dollars for every one we spend.’
Junior Javier Hernandez, a French and management double major, said the SAFRA would help him as he has ‘a heavy financial need.’ He depends on the Pell Grant, scholarships and loans to float his school bill, which means that a switch to direct loans would personally affect him and his family.
‘It looks like it will make school more affordable for everyone, especially for those who struggle (to raise) the funding to pay for it,’ Hernandez said.
The Congressional Budget Office estimated that over the next decade, $87 billion would be saved due to the decreased interest rates promised by the bill.
Houston Independent School District Board of Education member Harvin Moore said there are worries that the legislation may only help the poor, struggling students and their families, while failing to distribute evenly to their middle-class peers.
‘The Pell Grant helps students with a background of moderate income also, but only helps with about 30 percent of associated education fees, and since (the SAFRA) will increase the effectiveness of this grant, more tuition will be covered,’ Moore said.
Minorities are not overlooked by the legislation’s components, as $2.55 billion will be invested in overwhelmingly black and minority-populated schools.
All new applications for federal student loans will work through the direct loan program beginning July 1, 2010, creating a much different option for the 5.5 million students across the nation who depend on loans each year.
‘(It) is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy,’ Betsy Kittredge, research and outreach director of the Committee on Education and Labor, said in an article for the CEL journal.
Last year, 500 schools altered their loan processes to reflect the direct loan program in addition to 1,200 other schools that already administered the plan, according to the CEL. Installation of the plan did not lead to budget hikes as many Republican critics expected.
Republicans in the House were not inclined to vote for the SAFRA, as only six voted in favor of the bill, compared to 253 Democrats who voted to pass the measure.
Lending plans would be converted from the Federal Family Education Loan Program, which is a slow and complicated system, according to the CEL. If the SAFRA is passed into law, about 4,500 schools can expect to undergo the transformation by the time the bill is fully functional. By 2019, the annual Pell Grant maximum would reach $6,900, up from $5,550 in 2010, due to $40 billion that would be redistributed by the government, according to the CEL.
The bill would pump more financial support into the College Access Challenge Grant Program to ensure an early start for students who want to learn and complete their degrees. Also, more universities would be eligible for the Perkins Loan Program, Kittredge said.
The CEL also said that modernization and renovation to school campuses are part of the bill.
‘(It) provides every child with access to a world-class learning environment,’ Kittredge said, ‘by providing school districts with funds for school modernization, renovation, and repair projects that will create healthier, safer, and more energy-efficient teaching and learning climates.’
