As reported in the Washington Post, the House Education and Labor Committee cleared a bill that would drastically revamp how college students get aid. Even though the bill made it through committee, it isn’t guaranteed to survive the full House or Senate.
The Student Aid and Fiscal Responsibility Act of 2009 would effectively eliminate private lenders when it comes to subsidized student loans. The Department of Education becomes the direct lender for any subsidized loans with Sallie Mae, NelNet, American Education Services/PHEAA and Great Lakes Education Loan Services as the companies servicing them, according to MSN.
The bill would also increase the maximum amount a student could get through federal Pell Grant awards, which was right around $4,700 last year. By 2019, that amount would be $6,900.
House Republicans, though, oppose the bill, pointing out that the current program would generate an estimated $70 billion in private capital. The Democrats believe the new program would save roughly $87 billion over 10 years, which could boost the Pell Grant program or even offer more loans.
For me, it’s a tough call. I was a beneficiary of subsidized college loans and Pell Grants, and I definitely think people should benefit from federal aid. However, I wonder if the current system truly needs an overhaul, especially considering the proposed bill institutes drastic changes.
What do you think? Does the federal financial aid system need to be reworked? Post your thoughts here.