$20 Billion Student Aid Package Passes Both Houses

Student Aid Bill passes Senator Edward M. Kennedy celebrated the passage of the Student Aid Bill, on Friday, September 27. This legislation includes the largest increase of student aid since the GI Bill. The House voted 292-97 for the student aid bill on Friday while earlier in the day , the Senate voted 79-12 to approve it. All the lawmakers who voted against the bill were Republicans. President Bush has indicated he will sign the legislation despite earlier misgivings. The administration had criticized a student loan interest-rate cut and a new loan-forgiveness program. House Democrats had made the interest cut a priority during the last campaign leading up to the last election, according to Nancy Zuckerbrod, AP Education writer. The boost in financial aid to students was one of half a dozen domestic priorities Democrats set when they took control of Congress this year. Two others-an increase in the minimum wage and mandatory air and sea inspections- already have become law and a third, ethics reform, is awaiting the President’s signature. "This is an exciting day for parents and students who struggle to put together the financial means to pay for college ," said Rep. George Miller, D-Calif., chair of the House education committee. According to a Dow Jones report, the bill includes a temporary reduction in student loan borrower interest rates and a phased-in $1090 increase in the annual maximum Pell Grant to $5,400 a year. Because the interest rate is phased in over time and then expires, savings to borrowers would be relatively modest at $2,000 over the life of a loan for a typical student entering college next year. If the rate were made permanent, at its peak, savings would be closer to $4,000. Senator Kennedy’s office prepared two press releases. In one it says-"Nelson Mandela once said that education is the most powerful weapon which you can use to change the world. As Americans , we have understood the truth of this statement throughout our history. From the beginning of our republic, we have looked to the future and invested in future generations of Americans. We knew that a good education for our citizens would improve lives and in our own way change the world. Funding for this program comes from a reduction of $20 billion in federal subsidies to banks that are considered excessive. The subsidies were established to ensure that banks enter and stay in the college loan business. .