While most college students were on winter breaks, the US Senate was debating over a bill which included massive student loan cuts. On December 21, 2005 in a 51-50 vote the US Senate passed a bill which included $12 billion in student loan cuts from the federal budget. Vice President Cheney cast the tie-breaking vote, while five Republicans sided with the Democrats who unanimously opposed the bill.
A second blow was wielded this week when the House passed a bill also in favor of the student loan cuts. While 13 moderate Republicans joined House Democrats in a no vote, not enough opposition was gained and the bill passed 216 to 214.
The drastic measure eliminates $2.2 billion in critical funds used to administer the federal student loan programs. Additional changes included a new 1% insurance fee that student borrowers must pay to guarantee agencies and raising the interest rate cap for parents who take out federal education loans for their children from 7.9 percent to 8.5 percent.
The bill outlines a total of $39 billion in budget cuts which besides the student loan cuts, severely reduces Medicaid and Medicare programs for low income and senior Americans. The measure is expected to be signed by President Bush next week.
This measure flies in the face of President Bush’s comments in the State of the Union Address on February 1st where he emphasized the importance of education.
Virginia Governor Tim Kaine said, “…the Republican leadership in Washington is actually cutting billions of dollars from the student loan programs that serve working families, helping to get their children through college.”
While opposition to the measure has been strong, Republican leadership ensured that these critical aid programs will be cut.
About the Author: Sandra D. Sims is the Editor & Publisher of http://CollegeFinancialAidGuide.com an online resource for college educational funding including college financial aid information and student loans.
