Congress debates $15 billion cuts for federal student loans

By: Somsopheap Vey

Posted: 11/22/05

11/22/05 - A bill being considered by the U.S. Congress that cuts about $15 billion from federal subsidized student loans would result in higher loan payments in the future for University of Rhode Island students.

"It'll cost more for students," Director of Enrollment Services Harry Amaral, Jr. said, referring to how much more students would be paying for their loans while in school, and in consolidating their loans when they get out.

"There will be higher interest rates," Amaral said. "They won't have the option of just fixing their interest rates when they graduate from school, without an additional 1 percent they have to pay."

Amaral said he prefers an alternative bill in the Senate.

"The Senate bill has the Higher Education Reauthorization Act attached to the Reconciliation bill, which is a benefit because then they won't be able to attack on different amendments," Amaral said.

He added, "In the Senate bill, we have some ... reconciliation package to take [some of the] savings and to provide some additional resources to the financial aid program."

The Senate bill has a possibility of increasing the Pell Grant by about $6 billion over the next five years. "[It] would increase Pell Grants by about $100 per student per year over the next five years," Amaral said, adding that it would also create new programs for low-income students who are receiving the grant.

"All the details haven't been worked out yet ... we assume it will be for Pell Grant students who major in math, science and foreign languages," Amaral said. He added that they could receive about $1,500 per year.

Another positive effect the bill offers is increased borrowing limits for students.

"So freshman year was $2,625 and that will increase to $3,500, sophomores were $3,500 and that will have an increase of $4,500 per year ... the juniors and seniors will remain the same at $5,500," Amaral said.

He added that the House of Representatives' bill does not do so. "We're now faced with a reauthorization bill," Amaral said, adding that both the House and Senate may extend the bill, but it is unsure.

U.S. Congressman Jim Langevin, D-R.I., strongly disagrees with the House's bill.

"It's a real problem for students," he said about how the bill does not benefit students in need of a higher education.

"What we're creating is a situation where only the very wealthy are going to be able to afford college, and people that need the help the most aren't going to get it," he added.

Amaral would like students to write to their Congressmen to encourage their support for financial aid programs.

"What we need is all the students to write their sentences to Congressmen and encourage them to support financial aid programs," Amaral said. "It is difficult enough paying for our increased costs, without another change in ... financial aid programs."