What Next For Student Aid Reform Bill?

Washington Post weighs in noting that most now assume that the student aid legislation will be moved through budget reconciliation:

"Four months after it sailed through the Democratic-led House, legislation to overhaul federal student lending and channel about $80 billion in savings toward an array of education initiatives has stalled in the Senate.

In his State of the Union address Wednesday, President Obama exhorted the Senate to pass the bill, which he said would revitalize community colleges and make college more affordable. But the bill faces unified opposition from the Republican minority and sharp questions from at least some Democrats, according to congressional aides from both parties, and the Democratic majority has put it on hold during the drawn-out health-care deliberations.

The assumption on Capitol Hill is that Democrats will attempt to move the student loan bill through a special procedure that requires a simple majority rather than the usual 60 votes out of 100 needed to stop a filibuster. That tactic is also under discussion for health-care reform, said the aides, who asked for anonymity to speak candidly. So the two issues have become intertwined."

In terms of timing: 

"Sen. Tom Harkin (D-Iowa), chairman of the Health, Education, Labor and Pensions Committee, has not introduced his version of the House bill, passed in mid-September on a vote of 253 to 171. He said he plans to move a bill "early this year."

In Politico's interview with Secretary of Education Arne Duncan earlier this week, he was asked about Administration proposals to make college more affordable:

"MR. ALLEN: In the President's Middle Class Agenda, he talked about capping the payments for federal loans- 10 percent of income. But students are still taking on a ton of private debt. What can you do to make it more affordable for people to go to college without just subsidizing more loans?

SECRETARY DUNCAN: Yeah. Well, obviously all the work around increasing Pell grants, the tuition tax credit that the President talked about, maintaining that $2,500 credit for the middle class is a huge deal, and, again, if this bill passes the House, HR 3221, passes the House, goes to the Senate, that will bring literally tens of billions of dollars to make college much more affordable. We have a chance to stop subsidizing banks--invest it in young people, which is controversial, hard, whatever. I think it's an obvious right thing to do. How often in life can you put $80 billion into education, into making college more affordable, into early childhood education, into community colleges without going back to taxpayers for a dime. We have an opportunity to do that, and I hope the Senate takes the appropriate action here.

While the bill remains stalled, the Department has remained active in sending letters to college presidents today and rolling out regional training sessions to assist schools transitioning to Direct Lending. 

Comments

[Bizzaro Watchdog]

Let me translate what Arne told Politico's Mike Allen for you:

"Yeah, well Mike, obviously the easiest thing for us politicians to do, is to just kick the can down the road! This 10% repayment thing, well, it's just good political theatre! The costs of the forgiveness programs don't show up in the CBO's 10-year scoring window. So, we'll leave it for the next President and Congress to deal with. Just like the impending doom of Medicare, Medicaid, and Social Security. (Not to mention all the states that can't afford their public-sector pension liabilities.) And in the meantime, we'll pretend that things got cheaper for everyone, when in reality, we're just favoring one section of the country over the other. Take a look at what we did for the unions and their so-called "Cadillac" health-care plans for instance. And, as you know, the private sector isn't as unionized as public sector anymore, so we score again with the unions here with our public-service loan-forgiveness program! I think you get the idea of what we're doing here Mike--make sense?"

What an eloquent man Arne is! Must be in the water in Chicago.

[Ron Tough]

It's like this:

Colleges say: tuition costs X
Students say: to pay for college we will borrow X
Colleges say: great, next year tuition will be X+10%
Students say: great, the federal government and private lenders will lend us X+10%

This goes on and on for years and now college is completely unaffordable for the middle class (and some of the upper-middle class); and the amount of money students borrow puts them into a deep hole upon graduation; and now that the country is in a deflationary depression, there are no jobs to earn money to repay their overinflated student loan debts.

I borrowed (or sold my soul) for a bachelor of science and piece of paper that says Juris Doctor. $180,000 with accrued interest it cost me.

I'm 6 years out of school and I've only been able to repay $60,000 of it, which believe me, is much much more than most people I know. I still know attorneys who have loans deferred, and they've been out of school as long as I have...

Some of these students loans will never be repaid.

Maybe I'm the fool for actually trying to repay them.