Congress sent President Bush legislation on Sept. 7 that would cut $20 billion in government subsidies to banks that make student loans, thereby increasing financial aid for college students.
If Bush signs the College Cost Reduction Act, it will take effect on Oct. 1.
The South Florida Sun-Sentinel reported the following on Saturday:
The Bush administration has criticized the student loan-forgiveness and student loan interest-rate cut programs, but House Democrats have garnered wide support for the legislation. The House voted 292-97 in favor of the bill, and the Senate likewise approved the legislation in a 79-12 vote. All South Florida House members and both Florida senators voted in favor of the legislation.
The bill would increase the maximum Pell grant, which goes to the poorest college students, from $4,310 a year to $5,400 a year by 2012. Additionally, over the next four years the legislation would cut interest rates on federally backed student loans in half, from 6.8 percent to 3.4 percent. This measure would help poor and middle-class students.
College graduates working in public service professions, such as teaching or nursing, would also benefit. This legislation provides a loan-forgiveness program for those students who work in public service for 10 years.
Florida schools such as Florida International University and Florida Atlantic University have supported this bill, which both have high numbers of students receiving need-based financial aid.
According to the University of Miami’s website, students received $20.7 million dollars in federal grants and college work study in the 2005-2006 school year, and an additional $96.8 million dollars in federal grants certified by UM.
Adela Ghadimi, speaker pro tempore of the student government senate, authored a resolution supporting the passage of the College Cost Reduction Act.
“Congress defines unmanageable debt as debt that takes up more than eight percent of your income,” Ghadimi said. “I thought this was crazy because anyone with student loans knows it takes up more like 300 percent.”