Washington
The U.S. House of Representatives approved legislation late Sunday that would expand health-insurance coverage for Americans and end the bank-based system of distributing federally subsidized student loans.
The bill, HR 4872, approved on a vote of 220 to 211, was controversial nationwide largely because of its health-care provisions. Yet its passage by the House, and expected approval within the next few days by the Senate, will also close two decades of debate over whether colleges, students, and taxpayers are well-served by the inclusion of private lenders in the federal student-loan system.
The end of the bank-based system will save about $61-billion over 10 years, according to the nonpartisan Congressional Budget Office. Most of that amount, $36-billion, will be used to help finance annual inflation-adjusted increases in the value of the Pell Grant for low-income students. The projected savings will also benefit historically black colleges, community colleges, and other programs to help low-income students afford higher education.
The House passed a version of the student-loan bill back in September, but Democrats did not have enough votes to get it approved in the Senate. The version approved Sunday, as part of a package with the health-care measure, represents a compromise that reduces the amount of money being dedicated to education programs. It is seen as having enough votes to get through the Senate.
In the only change since the compromise version of the bill was announced on Thursday, Democrats removed a provision that would have given a specific right to the state-owned Bank of North Dakota to issue federally subsidized student loans, meaning that it would have been the only lender still collecting subsidies for issuing federally backed student loans. The provision, seen as an attempt to ensure the support of North Dakota's congressman, Rep. Earl Pomeroy, was removed after criticism from Republicans.
Comments
1. laughin_otter - March 31, 2010 at 11:36 pm
Well, it's about darn time!!!
When I was trying to line up a student loan for grad school in 1996, no one but no one told me that I could go directly to the feds. I assumed the entire student loan scene had been fully privatized. Also, trying to decipher the ins and outs of the various arrangements was all but impossible, and no financial aid officer was about to explain it all in plain English.
I won't try to protect the school--it was University of Connecticut at Storrs. The financial aid office acted as if it had some kind of directive to squeeze as much student loan money out of me as possible.
Only now are we beginning to learn about the sweetheart deals and incestuous relationships between universities such as UConn and the private student loan industry. Literally the only bulwark between students and the student loan sharks has been the federal rules, flimsy at best.
Hallelujah!
2. laughin_otter - March 31, 2010 at 11:40 pm
P.S. Now, Mr. Obama, please get us (1) amnesty at retirement age or for prolonged underemployment, (2) the right to declare bankruptcy when loan balances go through the roof due to inability to pay regularly, and (3) curtail the endless compounding of interest during forbearances and deferments, which leads inevitably to (2).
Thank you.