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by Eddie London, business editor

“The Republican Raid on Student Aid… represents a significant step backwards when it comes to creating college opportunities for all qualified students,” stated Rep. George Miller (D-Calif).

“These budget cuts are taking place because of tax breaks for the wealthy,” commented Congressman Ron Kind, who represents Wisconsin’s Third Congressional District.

A number of budget issues, including the $106 billion tax cut for the wealthiest 3 percent of U.S. citizens, Hurricane Katrina relief, and the Iraq war, are all having an effect on Congress’ need to pull money from other programs such as student aid.

Included in these cuts will be almost $8 billion in new charges to student borrowers. These new charges will manifest as $5.46 billion to student and parent borrowers when they consolidate their college loans; $1.82 billion in new taxes on student loans for both student and parent borrowers; and, $505 million in interest on student and parent loans as the maximum student loan interest rate of 8.25 percent increases to 9 percent.

“ Rather than seizing an opportunity to make college more affordable for students, this committee will make it more expensive,” Miller said.

If passed the new bill would cause typical student borrowers, with already $17,500 in debt, to pay as much as $5,800 more in interests costs over the life of their loans.

The Student Aid Bill would also widen the college participation gap between wealthy families who can afford to send their children to college and lower and middle income families who depend on loans, scholarships, federal aid, and grants to sent their children to college. This gap would grow if underprivileged children were denied federal aid and loans. Miller and others belive this gap needs to be closed for the United States to be prosperous as a whole instead of just prosperous for the wealthy.

Closing the current college participation gap between minority and white students could add $250 billion to the national gross domestic product and $85 billion in tax revenue to strengthen our economy and improve the quality of life for all Americans, according to “Pelosi 411,” an online bulletin from the desk of Nancy Pelosi, the House Democratic Leader.

Pelosi 411 provides updates from Capitol Hill about the legislative issues that impact the younger generation across the United States.

“ Education is a right not a privilege…(Student aid cuts) will be essentially privatizing higher education,” said Jordan Burghardt, a senior at the University of Wisconsin at Madison, in a press conference call with Rep. Miller and Rep. Kind.

Federal student aid and support programs such as Pell grants are some of the few things which are helping lower-income and middle-income families send their children to college. Even before the recent congressional activity, Rep. Miller pointed out in the press conference call, an increasing number of students are foregoing a college education for financial reasons. If Congress slashes aid to students, more will be unable to attend college. “The price of college is going up faster than families’ ability to pay for it,” Miller declared.

Both Miller and Pelosi pointed out that for the United States to stay competitive with other countries in the future, it is essential that it have a highly educated workforce. Already countries such as China are graduating four times the number of engineers as the United States, and even graduating more English-speaking engineers. Europe in the past year has graduated three times as many engineers as the United States.

With the new Federal Student Aid cuts, “long-term economic and national security is at risk,” said Kind. More than half of the current science and engineering workforce in the United States is
approaching retirement. By 2020, the United States is expected to experience a shortage of up to 12 million college-educated workers.

 

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