Saving money for college could get a whole lot easier. The United States House of Representatives recently voted on legislation that would increase the amount of federal aid students are able to receive for their college education.
The bill, known as the “Student Aid and Fiscal Responsibility Act (SAFRA),” passed in the house by a vote of 253 to 171 and has been sent to the Senate, where it is predicted to pass.
If SAFRA were to pass, it would have a direct impact on community colleges nation-wide. SAFRA includes a section in its legislation that would set aside 9.5 billion dollars to community colleges. Out of the aforementioned figure, 2.5 billion dollars would go towards improving facilities and campuses; the rest would go towards grants.
The bill would introduce a competitive grant program that would encourage community colleges to improve instruction, facilities, student support services, and implementation of other reforms.
The bill would also invest 40 billion dollars over the next 10 years to increase the maximum annual Pell Grant. In 2010, the maximum amount for an annual Pell Grant scholarship would be raised to 5,550 dollars and would continue to increase over the years.
According to the bill, the Pell Grant would increase to match the rising cost of the standard of living, and will be indexed through the Consumer Price Index, plus one percent.
SAFRA would include provisions to improve the Federal Perkins Loan Program, which provides low interest loans to help needy students.
The legislation would require that, beginning on July 1, 2010, all loans are to be converted to the Federal Direct Loan Program. The bill would eliminate the need for students to apply and receive loans from private lenders. The government would then, in theory, save more money, because they do not have to guarantee or insure the private lender. The government will funnel the saved money back into financial aid or towards the national deficit.
The bill would also put an end to the Federal Family Education Loan (FFEL), because the program would no longer be able to generate revenue from new loans.
While this idea may seem great on paper, many republicans in the House opposed the measure, complaining about the increasing size of government and the government takeover of yet another sector that private loan officers used to control.
“Today’s vote was about expanding the size and scope of the federal government through tens of billions of dollars in new entitlement spending and the elimination of choice, competition and the innovation of the private sector,” said Rep. John Kline from Minnesota, who is the top republican on the Education and Labor Committee.
On the other side of the spectrum is Rep. George Miller, democrat from California and chairman of the House Education and Labor Committee, who said, “Today the House made a clear choice to stop funneling vital taxpayer dollars through boardrooms and start sending them directly to dorm rooms.”
For the most part, advocates for students support the passing of the bill, arguing that the legislation is looking out for the best interests of future students by offering more financial aid, student programs and better facilities.