College students may see a decrease in the amount of federal financial aid they receive -- as well as increased rates on such loans -- as Congress considers two different budget revisions dealing with funding for student financial aid.
"The cuts would increase the cost of borrowing for our students," said Director of Student Financial Aid Ellen Frishberg. "Our students pay 1.5 percent to borrow a student loan; congress is suggesting that this be raised to 3 percent, so that would double the fees," she said. The House version of the bill would also do away with students' ability to fix the interest rate at the time of consolidation.
"The average student loan in this country would increase by $5,800 because of the increase in interest and fees," said Maggie McIntosh, associate for federal relations.
The House version of the bill reduces available student aid funding by approximately $14 billion, while the Senate version reduces available aid by about $9 billion, according to McIntosh.
The House version primarily cuts funding available for federal student loans, as well as increasing interest rates and consolidation fees, while the Senate version primarily reduces the amount of funding available to lenders, said McIntosh.
While the Senate version mostly cuts funding for lenders, "those cuts are often passed onto students," Frishberg said.
If the cuts were passed, Frishberg stressed that the University would try to make up for any discrepancies. "The University's commitment to grant resources will remain the same, but students will end up paying more for their loans," she said. "I don't think that students here on financial aid need to worry that the University is going to pull any of their financial aid commitment."
She added that the University has been working with the Federal Relations Office and congressional delegations to prevent the cuts from passing. "We really do try to impact public policy. ... President Brody has been down in Washington, D.C.," she said.
The cuts are part of a larger budget deficit reduction effort as Congress tries to curb spending in the face of continuing expenditures in Iraq, as well as disaster relief for victims of hurricanes Katrina and Rita.
"On the house side, fully 20 percent of the cuts that they propose are in the area of student aid," McIntosh said. She called the changes in rates and fees "draconian," and added, "They're balancing the budget and putting all of the things that our government is involved in, including the Iraq war, on the backs of students."
Frishberg said the cuts are also to help fund disaster relief for hurricanes Katrina and Rita, "but it's like they're attacking poor people on the backs of poor people."
McIntosh added that the bill made "small strides," such as increased incentives in the form of grants for students studying math, science and engineering. Both versions of the bill also increased funding available for Pell grants, the main federal grant. However, "You can't say that there is a winner anywhere," she said.
In a press release of Sen. Barbara Mikulski's remarks concerning the Higher Education Act on Sept. 8, Mikulski said that the bill was "a step in the right direction," but "we need to do more to make higher education affordable and accessible for everyone."
In response to the House version of the reconciliation bill, Rep. Elijah Cummings said in a similar press release that the bill was an "ill-conceived reconciliation package" that embodied "misguided and short-sighted priorities" and was "devoid of humanity and compassion."
Junior Kimberly Parker said that if the rate increases in the House version of the bill passed, it wouldn't change any of her decisions. "Honestly, that rate is so low that it wouldn't affect my decisions," she said. "It's much better than any non-government loan rates."
However, Parker said the government should not take funding from federal student aid to fund disaster relief efforts. "I think it's ridiculous. Why punish college students, especially the poor ones, for the government's failure?"
Senior Christian Grim also said any changes wouldn't affect his decision to go to graduate school. But Grim supported the use of funding cut from student aid programs to aid victims of Katrina and Rita: "College in this country is most definitely not a right guaranteed by the government, so even though we get special rates we should be required to help out where we can," he said.
Both McIntosh and Frishberg encouraged students to voice their opinions concerning the cuts to government representatives. "We need students to be focused on this, especially students who benefit from the program," Frishberg said.
"There is a huge effort on behalf of students all across this country to prevent these bills from being passed," McIntosh said. "We are anticipating that [the House version of the bill] may come to the floor next week."
Frishberg said the University is currently working on its budget for next year, and any changes to federal aid will be reflected in tuition levels set in January.
