Barack Obama

Obama unveils student loan plan at SIUE

Wednesday, March 30, 2005

BELLEVILLE NEWS DEMOCRAT
BY NICKLAUS LOVELADY

Bill would increase Pell Grants by 26%

U.S. Sen. Barack Obama was at SIUE on Tuesday to announce his first legislation as senator - a bill that would increase the amount students can receive in Pell Grants.

The bill, the Higher Education Opportunity Pell Grant Expansion (HOPE) Act, would increase the maximum amount available to students by 26 percent from $4,050 to $5,100 per year and increase it each year at the same rate of inflation.

Obama's news was met with appreciation from students.

"I know people that come out of college with $20,000 in loans because the lack of grants available to us," said Shareyar Bhutto, a junior from Fairview Heights. "This Pell Grant will help us because we won't have to accumulate those expensive loans."

Obama told a crowd of about 200 gathered at the Morris University Center that the increase would help alleviate the need for loans. Families without a lot of money are put in a financial bind as tuition continues to rise, he said. During the past 25 years, tuition at U.S. colleges and universities has increased by 519 percent, Obama said.

"Families are hit three ways," Obama said. "First, the parents are trying to save for their retirement. Second, they are forced to help pay for the care of their older parents, and then they have to figure a way to pay for their child's college education.

"This a squeeze that families are feeling across the nation."

Across the country, 5.3 million students use Pell Grants to finance their college educations. In Illinois, 211,000 students received Pell Grants, totaling $486 million in awards last year, according to Obama.

Tasha Haddison, a junior from Edwardsville, said her family and friends can attest to the squeeze wrought by college expenses.

"My parents and I pay out of our pockets," Haddison said. "I have friends that are paying out of their pockets. Some have three and four jobs trying to pay for school."

Obama's proposal to increase the maximum award -- if enacted for 2006 -- would cost about $2 billion next year, said spokesman Robert Gibbs. The senator said the cost could be covered by eliminating the subsidies paid to banks and private lenders who participate in the government's student loan program.

President Bush has also proposed raising the Pell Grants, but by a smaller amount -- a $100 increase over the next five years for a total of $4,550. The Bush administration said his Pell Grant proposal would be paid for by shrinking subsidies the government pays banks to encourage them to make low-interest student loans, and to the agencies that insure the loans for the lenders. Bush would also phase out Perkins loans, which provided help to about 673,000 students last year.

"Even with me being a Republican, I think it's an efficient way of increasing the Pell Grant," said Brittany Marron, a sophomore from O'Fallon. "That's if (Obama's) able to do what he says he wants to do."