On Feb. 1, the U.S. House of Representatives passed the Deficit Reduction Act of 2005, proposing a budget cut of approximately 12.7 billion dollars from the federal student loan program.
If signed by the president, this bill will put one more straw in the bulging backpacks of college students nationwide by cutting the amount of loan money guaranteed by the federal government-thereby causing interest rates to rise. A federal Stafford Loan could possibly increase from a 4.7 percent interest rate to 6.8 percent. Additionally, the bill would further impose a 1 percent insurance fee on student loans.
Proponents of the bill seem to think that the changes will help reduce the federal deficit. But is going to college students for help with debt restructuring really the best plan of action?
I can almost picture the meeting in which this bill was born?.
On one side of the room, a Washington Angel strokes his harp and sings, “Let’s be more frugal, cut spending on useless committees and restructure our tax policies.”
After a few confused stares and awkward coughs, from the other side of the boardroom, a Washington Devil wheezes, “Let’s ease our national financial burden by burdening our students with debt. What are they spending it on anyway-rec centers and health insurance? Make them pay for their futures! Mwahahahah!”
The ensuing pandemonium drowns out the harping of the angel and signals the death of the underprivileged student.
Critics of the bill have said cuts to federal funding would overly burden students, who already borrow an average of $18,000 to finance higher education. The United States Student Association estimates that the bill will add several thousand dollars in interest payments to individual students’ debt.
College students are notoriously poor, bankrupt or in serious debt. Most undergrad and graduate students sustain themselves on external sources of funding like parents, financial aid, scholarships, student loans or a combination thereof.
Why is the federal government taking money away from those who need it most-from those who will constitute the economy of the future?
For our national government to slash educational funding like this is akin to Donald Trump asking his younger cousin Daniel for a handout. It is not only counterproductive, but also insulting.
This is perhaps the first time I’ve completely agreed with Sen. Ted Kennedy, D-Mass., and I must echo his statement that, “This bill abandons the government’s longtime commitment to ensuring that the neediest students get the most help?It imposes so many hurdles to new aid that it is sure to leave behind those who need our help the most to stay in school.”
Our government needs to realize that funding higher education is not like funding a committee or organization. It is a national investment with untold yield potential. Cutting education now is like cashing out a growing stock to buy a new boat: impressive to the neighbors, but hard on the kids’ futures.
On occasion, I’ll see a worn out, sad-looking panhandler making donation rounds on campus and think to myself, “Someone should really tell that guy that a college campus is not the prime location to get handouts. Unless he’s looking for ramen noodles, of course.”
This last week, though, I found myself wondering the same thing about our national government.
To get involved in fighting this bill, go to www.studentaidaction.com.