Melissa Brown
Published: February 8, 2006
By a vote of 216-214 on Feb. 1, the U.S. House of Representatives approved legislation that will cut roughly $12.6 billion from federal student aid programs, making loans more expensive for students and parents, as part of S. 1932, The Deficit Reduction Act of 2005.
More than 313,000 borrowers in Florida are potentially affected.
Republicans such as House Education & the Workforce Committee Chairman John Boehner (R-OH) applauded the bill’s approval, calling it an “address [to] the fundamental problem of runaway entitlement spending.”
Panhandle Representative Jeff Miller (R-FL) voted for the bill. His press secretary Dan McFall provided Miller’s statement regarding the issue:
“Jeff Miller is a fiscal conservative. The country is running a billion dollar deficit and our first priority is [reducing] national debt. We’re selling our debt to China – it’s a burden on all of us now to reduce spending.”
In striking contrast, all Democrats voted against the bill.
This follows the trend set last December when Vice-President Dick Cheney’s tie-breaking vote was needed to pass the bill in the Senate.
Republicans and Democrats disagree about the restructuring of federal student loan programs scheduled to occur after President Bush signs the bill into law, which he is expected to do without delay.
Students and parents will feel the most effects from the cuts, noted by Representative George Miller (D-CA), the senior Democrat on the House education committee.
“Congress has just enacted the largest raid on student aid in history in order to give more money to the wealthy, even while millions of American families are struggling to afford the rising cost of college,” he said.
In a press release issued by America’s Student Loan Providers (ASLP), ASLP Executive Director Kevin Bruns addressed the bill’s negative effects on higher education.
“No one in the higher education community can be happy with the magnitude of the student loan cuts contained in the conference report. Regardless of how you slice and dice it, a $20.3 billion cut in federal student loans is a big hit. A full $18.1 billion in cuts are from the Federal Family Education Loan Program. These cuts will have negative consequences for students, parents, schools, and loan providers.”
StudentAidAction.com, the State’s PIRG Higher Education Project, breaks down specific cuts that will potentially affect student and parent borrowers:
“- [Almost $13 billion] from excessive subsidy payments that student and parent borrowers make to lenders. This bill uses this money to pay for new tax cuts rather than sending it back to students through additional need-based grant aid or lower interest rates.
– Approximately $2 billion by increasing the parent loan interest rate from 7.9 percent to 8.5 percent.”
Although the bill does redirect some savings towards students, such as retaining the 6.8 percent cap on student loan interest rates, most opponents of the bill argue the benefits aren’t enough to counteract the cuts.
“We call on President Bush to uphold the commitment to American economic competitiveness that he made in the State of the Union address, by vetoing this bill, and pushing for more affordable student loan policy,” said Luke Swarthout, the State PIRG’s Higher Education Associate.