Veto threatens student-friendly CCRA

Although the House of Representatives approved the 2007 College Cost Reduction Act last week, the bill praised for its intent to protect college students' financial interests is under the threat of a veto from President Bush.

The bill would cut federal subsidies to student loan lenders nearly $20 billion over the next five years. With the saved money, the bill would increase funding for Pell Grant scholarships, help stabilize tuition and halve the interest rate of federally subsidized college loans, among other provisions.

The White House said savings from cutting the federal subsidies to loan lenders should be spent on need-based aid for students currently enrolled instead of cutting interest rates, which would create a set of expensive federal programs to assist students who for the most part have already graduated.

"His senior advisors would recommend that [Bush] veto the bill because it fails to target aid to the neediest students currently in college and creates new mandatory federal programs and policies that are poorly designed and would have significant long-term costs to the taxpayer," a White House press release said.

Rep. George Miller (D-Calif.) said reducing the interest rate on student loans would assist middle-income families who cannot receive Pell Grants, which target low-income undergraduates.

"It's unfortunate that the President would let a veto stand between millions of students and the college financial aid they so urgently need," said Miller through a spokesperson.

The Pell Grant is seen as a reasonable way to improve college affordability for students, according to Sarah Bauder, director of the university's Office of Financial Aid.

"The commitment to increase Pell Grant funding over the next five years addresses some of the issues with access, affordability, and choice for needy students," Bauder said. "Financial aid administrators nationwide have lobbied hard to have Pell Grant Funding increased."

Other key parts of the bill, such as cutting interest rates, has garnered criticism. These provisions are seen to place financial burdens for the federal government and taxpayers, although Miller says the bill would not increase taxes.

Bryan also pointed out that the decrease in federal subsidies would lessen competition among loan lenders.

Contact reporter Charles

Kunapermsiri at newsdesk@dbk.umd.edu.