House nears OK on dramatic expansion of college student aid
David Lightman, MCT
Issue date: 9/16/09 Section: News
WASHINGTON-The House of Representatives is expected this week to back overhauling-and simplifying-how college students receive financial aid.
The rules for awarding and repaying loans would remain unchanged, but the government would make all loans itself, ending the practice of subsidizing loans made by private lenders.
The Obama administration, which has made revamping the student loan system a major domestic priority, has hailed the bill as historic.
"This is a big, big deal," Education Secretary Arne Duncan said Tuesday at a news conference. He called the measure "the largest investment in higher education since the GI Bill" first passed in 1944 to help World War II veterans.
House Education and Labor Committee Chairman George Miller, D-Calif., vowed that the legislation would help students at "no cost to taxpayers."
That depends on how one interprets budget data, however. The nonpartisan Congressional Budget Office found that the loan program changes should save the government $86.8 billion over the next 10 years.
It also noted in its official July report on the bill, however, that it would include spending all but $7.8 billion of that on aid to students and higher education. In an update last week, the CBO said economic changes could boost spending overall by $10.5 billion, meaning that the bill could add to the deficit.
"The truth is, no one really knows how much this plan will cost," said Rep. John Kline, R-Minn., the senior Education and Labor Committee Republican.
Independent analysts agreed.
Changes in the loan program will "save a big chunk of money," said Marc Goldwein, the policy director for the Committee for a Responsible Federal Budget, a watchdog group. "Will it be the right amount to offset the new spending? The obvious answer is we don't know."
Goldwein warned that the new system's fiscal outlook would be "particularly uncertain" because it would depend on economy-related factors such as default rates, need-based aid and other factors.
The rules for awarding and repaying loans would remain unchanged, but the government would make all loans itself, ending the practice of subsidizing loans made by private lenders.
The Obama administration, which has made revamping the student loan system a major domestic priority, has hailed the bill as historic.
"This is a big, big deal," Education Secretary Arne Duncan said Tuesday at a news conference. He called the measure "the largest investment in higher education since the GI Bill" first passed in 1944 to help World War II veterans.
House Education and Labor Committee Chairman George Miller, D-Calif., vowed that the legislation would help students at "no cost to taxpayers."
That depends on how one interprets budget data, however. The nonpartisan Congressional Budget Office found that the loan program changes should save the government $86.8 billion over the next 10 years.
It also noted in its official July report on the bill, however, that it would include spending all but $7.8 billion of that on aid to students and higher education. In an update last week, the CBO said economic changes could boost spending overall by $10.5 billion, meaning that the bill could add to the deficit.
"The truth is, no one really knows how much this plan will cost," said Rep. John Kline, R-Minn., the senior Education and Labor Committee Republican.
Independent analysts agreed.
Changes in the loan program will "save a big chunk of money," said Marc Goldwein, the policy director for the Committee for a Responsible Federal Budget, a watchdog group. "Will it be the right amount to offset the new spending? The obvious answer is we don't know."
Goldwein warned that the new system's fiscal outlook would be "particularly uncertain" because it would depend on economy-related factors such as default rates, need-based aid and other factors.
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