Pittsburgh Post-Gazette ran a favorable editorial yesterday about the Student Aid and Fiscal Responsibility Act. Unlike the Wall Street Journal's editorial yesterday, the Pittsburgh Post-Gazette focused on how this bill will make college more affordable for students.
This bill would take the middle man - banks and private lenders - out of federally guaranteed student loans. Right now, the U.S. Education Department makes some student loans directly, but the rest - worth millions of dollars each year - are made by private lenders, who then receive government subsidies for doing so. Eliminating those payments will save $87 billion over 10 years, according to the Congressional Budget Office, so the bill will pay for its other provisions.Investing savings into increasing Pell grants and Perkins loans is only one part of this reform. Learn more about additional investments in community colleges, early learning, energy efficient schools and deficit reduction in the Student Aid and Fiscal Responsibility Act.
More help then will be available to more students. Over the next 10 years, $40 billion would be invested in building up the government's Pell grants, need-based scholarships that do not have to be repaid, so the maximum award available could go up annually, to keep pace with rising college costs.
The bill also would allow an additional $6 billion for Perkins low-cost, low-interest loans, thus reducing the number of students who would have to take out private educational loans, which have higher interest rates.
