NICOLE ALBERTSON
News Assistant
Congress sent legislation to President Bush that will increase financial aid for college students. The new bill, approved by the House and Senate on Friday, will cut $20 billion the government normally pays student lenders in subsidies, and moving it directly to student funds through Pell Grants.
The legislation calls to “increase the maximum Pell Grant, which goes to the poorest college students, from $4,310 a year to $5,400 a year by 2012,” according to the Associated Press. Interest rates will also be reduced from 6.8 percent to 3.4 percent on federally backed loans to low-income and middle-class students.
The legislation places a limit on the monthly payments for federally backed loans at 15 percent of the borrower’s discretionary income. The discretionary income is determined by the amount of money used after the essentials- food, clothing and shelter- have been funded. The bill is expected to be signed by Bush and become effective Oct. 1.
As for the 75 percent of Pepperdine students receiving financial aid, only new loans will benefit from the new legislation.
Bush has declared that he will sign the legislation even though he has previously objected to parts of the bill. But some students are hesitant to believe the bill will be signed into law.
“It would be great, but I don’t believe that it is going to happen,” said senior Ginny Hanson.
Because the bill is going directly against Bush’s previous agenda to increase the interest rates on student loans, there is a small chance of the bill being signed, Hanson said. Some educational analysts also doubt the impact of the changes, according to the Sept. 8 Boston Globe.
Shelley Steinbach, former general counsel of the American Council on Education told the Boston Globe, “increasing the Pell Grant from 4,000 something to 5,000 something by the year 2012 will not have a really significant impact, given the likelihood of inflationary costs in everything that goes into providing higher education.”
While the amount of student loans depends on individual need, the annual increase of school tuition leaves students to multiply the amount of loans they take out each year. “My financial aid coverage started out as 90 to 95 percent and then continuously decreased as tuition rose,” said senior Angela Koh. “What started out as $5,000 in loans my first year, it has increased to almost $10,000 in loans for just this semester.”
If the bill is signed into law, it will also give “financial forgiveness” to students who enter public service jobs after college. Legislation was sent to Bush on Friday after the House voted 292-97 and the Senate approved the measure 79-12.
While some graduating students are too late to benefit from the new financial aid plan, it will immediately benefit future college applicants who require financial aid.
“It is going to be great for future generations to apply for college and hopefully encourage more students to go for higher education,” said senior Dania Lopez.
09-13-2007