The Perkins loan program and Supplemental Educational Opportunity Grants
(SEOG) are in danger of being eliminated by the Bush Administration.

Last Monday, The Bush administration proposed to slash subsidies
paid to financial institutions that make college loans.

President George W. Bush unveiled a broad overhaul of student aid programs
in his fiscal 2008 budget.

The White House said it wants to trim “excessive or unnecessary subsidies”
paid to student lenders, reduce loan guarantees and cut how much money
guaranty agencies are allowed to keep when collecting on defaulted loans.

Savings from these changes would be channeled into boosting the widely used
Pell grant program by about $20 billion, with the maximum Pell grant award rising
to $5,400 by 2012 from its present level of $4,050, under Bush’s proposal.

Bush’s budget must now go before the Democratic-controlled Congress.

“The president’s proposal to cut outrageous lender subsidies and redirect
those funds into a long-overdue increase in the Pell grant shows how a
Democratic Congress is changing the nation’s priorities,” - Senator Edward Kennedy.

“However, we should reject his proposal to cut programs like SEOG and the
Perkins loan program, which low-income students depend on,” said the Senator.

In January, The House approved a bill to cut in half interest rates on
many student loans to 3.4 percent over five years.
Cut your monthly student loan payment by up to 60%
In hearings expected to start this month, Kennedy will seek support for legislation
he has introduced that directly threatens Sallie Mae and other student lenders
and processors, such as Citigroup, Wells Fargo, Wachovia, Bank of America,
JPMorgan and Nelnet.

Kennedy wants to reward colleges for steering students to direct government loans,
instead of government-guaranteed loans from Sallie Mae and the banks.
Sallie Mae said Bush’s proposed cuts would drive lenders out of the Federal Family
Education Loan (FFEL) program.

U.S. college costs have risen sharply in recent years, with the average, in-state
expense of attending a public four-year college approaching $13,000 a year,
up 35 percent since 2002.

Private college costs are averaging about $30,000 a year.

Student debt has doubled over the past decade while tuition has risen faster than
inflation. Over the past 20 years, inflation measured by the Consummer Price Index (CPI)
has increased by 84%.

The cost of both private and public schools over the same period, increased by almost
Three Times As Much. Middle class families and low income families are finding themselves
in a crisis with respect to the accessability and affordability of higher education.

This entry was posted on Sunday, February 11th, 2007 at 1:53 pm and is filed under Student Loans, Financial Aid, Scholarships, Grants. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.