Bush signs bill to increase student aid
“I have the honor of signing a bill that will help millions of low-income Americans earn a college degree,” said President George W. Bush, surrounded by students and lawmakers on Sept. 27 while he signed the College Cost Reduction and Access Act, a bill to make college more affordable for students from low and middle-class families.
The bill raises the maximum Pell Grant, an educational federal grant which requires high levels of need, from $4310 to $5400 over five years. The bill also and will reduce federal student loan interest rates from 6.8 percent to 3.4 percent over four years.
Moreover, the bill will limit the amount of money a borrower needs to repay to 15 percent of the borrower’s discretionary income when they earn under 1.5 times the poverty line.
Having originally threatened to veto the bill, on the grounds that “it included hidden costs and was an expensive expansion of federal programs,” according to a Sept. 28 article in the Michigan Daily, the President was forced to patronize it due to overwhelming Congress support, with a vote of 79–12 in the Senate and 292–97 in the House of Representatives, rendering the veto virtually ineffective.
Bush voiced his objections to the bill at the ceremony, which chiefly concerned how the increase in funds will be accommodated in the federal budget.
“This bill makes some spending commitments that aren’t paid for yet,” he said. “I look forward to working with the Congress to ensure Pell Grant increases that are not fully funded in this bill are paid for with offsets in other areas.”
It is important that students understand the large-scale implications of such a bill.
“A federal government working to increase possibilities for a greater part of the population to gain a formal education degree is a great step forward into becoming a more aware and productive nation,” said Kevan Tavalosi, a first-year finance major.
The bill was finally approved after two failed attempts this summer to pass the necessary legislation to increase financial aid, which the President and some student loan companies strongly opposed.
“The new law will take away 80 percent of the companies’ federal subsidies over the next five years,” said Kevin Bruns, executive director of America’s Student Loan Providers. Consequently, he said, this will mean fewer loan benefits for students.
However, despite these possible setbacks, the signing of the bill means that aiding disadvantaged students, one of Bush’s original priorities, is now more of a possibility.
Linda Anderson, director of Enrollment Services at Carnegie Mellon, believes the bill will have a positive impact.
“For next year and the year to follow, the $490 increase will result in increased awards for our students here at Carnegie Mellon and across the nation, which is good; the interest rate reductions will undoubtedly also help,” Anderson said.
“However, the other side of the coin holds a greater challenge for students and parents to determine their borrowed benefits, because these will be in constant fluctuation throughout the year. You will see smaller lenders have severe competition, which will result in extreme challenges for them, and the possibility of unprofitability.”
At the ceremony, Bush also drew awareness to an aspect of the bill that he liked — new flexibility on college-loan payments for military personnel on active duty. He congratulated the Democratic chairman of the House Education Committee, George Miller (D–Calif.), for working with him on it.
Students applauded the President’s flexibility on the issue.
“It seems as if Bush is beginning to compromise with the Democrats and take actions that are less conservative,” said Vidhi Luthra, a first-year business and finance major. “This bill gives more underprivileged kids an opportunity to do something with their lives — and that, on its basic terms, deserves to be applauded.”