Changes Brewing

[From the New York Times at
http://www.nytimes.com/2004/05/06/opinion/06THU3.html?th]


Congress Ducks the College Aid Crisis

Published: May 6, 2004


The Higher Education Act of 1965, due to be re-authorized by Congress
this fall, was meant to ensure that no academically qualified American
would be barred from college for financial reasons alone. But the door
has been steadily closing, thanks to soaring tuition costs and
declining student aid. A federal commission estimates that up to 4.4
million Americans will be turned away from four-year colleges for
financial reasons in this decade alone.

House Republicans have suggested changes in the law that would make
things worse. Their bill would fail to increase federal Pell grants,
which covered more than 80 percent of the average public-college
tuition for the poorest students a quarter-century ago but covers only
about 40 percent today. Without a long-overdue increase for Pell
grants, everything else amounts to tinkering at the margins.
Meanwhile, the bill would increase students' debts by wiping out a
provision that allows students to consolidate their loans at a fixed
low rate. That provision would benefit private lenders, which are
eager to charge whatever the market will bear, and would burden
students by driving up interest rates.

On the plus side, the bill would require banks to return a portion of
their excess profits on student loans to the government. But it ducks
a much more important reform: replacing the Federal Family Education
Loan Program, which unnecessarily enriches the banks, with a direct
loan program that would allow students to borrow directly from the
government. This would save billions of dollars that could then flow
to student aid, not the banks.