Going to College?

The Senate Education Committee and the House Education Panel have begun work on a massive overhaul of the $85 billion-a-year student loan industry. To help rid problems associated with student loan agencies, the committees have proposed loan systems that will cut federal subsidies to lending companies by as much as $19 billion with savings being redirected into student aid.

The legislation has also proposed new rules designed to increase borrowers’ propensity to use the programs such as a cap that will ensure borrowers pay no more than 15% of their discretionary income for federally backed student loans as well as a clause that relieves borrowers of their debt after 25 years. Other potential ideas include piloting a “loan auction” in which companies would bid to participate in the federal loan program by stating the lowest subsidies they would accept from the government.

The two chambers have so far proposed bills that contain slightly different ideas on just how the final legislation will look. Ultimately the two will need to find a way to reconcile differences including the actual amount of subsidiary money cut, however senior officials predict that the process will be a short one and could be complete as early as the end of July.

In recent years the student loan industry has come into great scrutiny following what are believed to be unfair practices limiting student’s access to loans and making debts insurmountable. Supporters of the bill hope it will be able to suppress the partisan squabble over student loans, which, if early indicators hold true, may be justified optimism.

As Sen. Edward M. Kennedy (D-Mass.) explains: “This legislation will help reverse the crisis in college affordability…It will restore balance to our broken student loan system by reducing unnecessary lender subsidies.”

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Rock the Vote Bio: Rock the Vote was founded in 1990 to organize artists and fight against censorship of musicians. Since then we've evolved to focus on empowering young people to get involved in the political process. We use pop culture, peer-to-peer organizing, and the latest technology to raise visibility of politics and demystify the process of registering to vote. @rockthevote Email the author at: blog(at)rockthevote.com

This entry was posted on Friday, June 22nd, 2007 at 1:34 pm and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.