Putting Students Last

Earl Hadley

July 27, 2005

Earl Hadley is education coordinator for the Campaign for America's Future .

News Alert: Republicans put corporate interests before students.  All right, maybe this isn’t news—perhaps more of a mantra—but thanks to House Republicans, students are again getting the short end of the stick. Last week, the House Education Committee passed a new version of the Higher Education Act, which sets the rules for college financial aid. The committee also passed up an opportunity to give students struggling to pay for college a helping hand.

The GOP will claim that there are a number of good things in the bill, like raising the amount students can take out in loans.  They’ll also point out that they are agreeing (finally) with Democrats and allowing students to continue to fix the interest rate on their loans at a low rate for the life of the loan, rather than forcing them to accept a fluctuating rate. Improving access to loans is a positive move. It might keep some students in college, or reduce the number of hours they have to work while in school.

But, ultimately, focusing on increasing the amount students can borrow misses the point. American families and students need the federal government to take a leadership role in making college affordable for every qualified student. This means much more than adding a few boulders (in the form of additional loans) to the mountains of debt many students find themselves shouldering upon graduating.  Meaningful leadership demands increasing financial aid for students, and if that requires upsetting corporate powers, then so be it.

Instead of leadership, the majority of Republicans on the House Education Committee this past week demonstrated only cowardice.  On a party line vote, they killed an amendment that would have taken billions in subsidies from student loan companies and given it directly to students, and instead they chose to use those dollars to reduce the budget deficit.  Not surprisingly, the only way Republicans convinced student loan corporations to accept a cut in their subsidies was through increasing the fee students pay when they try to fix the interest rates on their loans.  Republicans also set the maximum interest rate students can pay at 8.25 percent, rather than the lower rate of 6.8 percent that was scheduled to go into effect next year.

In another nod to the loan industry, Republicans rejected a bipartisan amendment that would have allowed schools to provide more aid to students.  The amendment, sponsored by Reps. George Miller, D-Calif., and Tom Petri, R-Wis., provided incentives to schools to use the Direct Loan Program, as opposed to the Federal Family Education Loan Program—the latter of which requires tax payers to provide billions of dollars in subsidies to loan companies.  The incentives the supporters of this amendment were proposing would have permitted colleges to use some of the subsidy savings from switching programs to provide financial aid to students.  Democrats report that this amendment would have freed up $17 billion for financial aid over the next 10 years. 

A week earlier in a subcommittee, Republicans raised the maximum the government can give students in Pell Grant funding by only $200, as opposed to the nearly $2,500 increase proposed by Democrats.  Their argument goes as follows: Since current levels are well below what’s already allowed—$4,050 vs. $5,800—why increase what’s allowed.  Republicans were essentially saying “We’re not even going to pretend that we intend to provide any serious increase in financial aid over the next few years.” In rejecting this Democratic amendment, they proved themselves to be either dumb or callous—either they don’t understand the significant financial burden attached to achieving a college education or they simply don’t care about relieving this burden. Considering that public college tuition may increase by 8 percent this year, one has to assume that they just don’t care.

Education Secretary Margaret Spellings, referring to last week’s vote, said, “This bill takes an important step toward realizing the opportunity-filled future President Bush envisions for all Americans.” This bill only presents opportunities for corporations and the wealthy.  It puts cutting the budget deficit ahead of giving students a college education. It shows that Republicans plan to turn the American promise of opportunity for all into a pipe dream.

The entire House of Representatives will vote on the Higher Education Act in September, and the Senate will begin to consider its version then as well.  Over the past few months, progressives have achieved a few victories, as some of the education program cuts proposed by President Bush have been rejected by Congress. Convincing Republicans to put students before loan corporations may well be a tougher sell, but at a minimum the priorities of these politicians must be challenged.  In doing so, we can remind voters of which politicians voted for Bush’s vision for America and hold them accountable in 2006.