[Sounds pretty good to me]
http://www.washingtonpost.com/wp-dyn/content/article/2009/05/03/AR2009050302251.html
Monday, May 4, 2009
Washington Post
Proposals Would Transform College Aid
Obama Plan to Expand Federal Control of Lending Includes Creating
Entitlement
By Shailagh Murray
President Obama's health-care goals may be garnering attention, but his
higher-education proposals are no less ambitious.
If adopted, they could transform the financial aid landscape for
millions of students while expanding federal authority to a degree that
even Democrats concede is controversial.
At stake is a plan to expand the Pell Grant program, making it an
entitlement akin to Medicare and Social Security. Key to the effort is
a consolidation of student lending that would give the U.S. Department
of Education a near monopoly over the practice -- a proposal that has
mobilized the private loan industry, which lent $55.3 billion to 6.4
million students in the 2007-2008 school year.
Obama outlined his initiatives, which also include incentives for
colleges to cut costs and to raise graduation rates, in the fiscal 2010
budget that Congress approved Wednesday, and Democratic leaders said
they hope to make them law by October.
The aim is to improve access to post-secondary school for those who
need it most: lower-income students for whom college or vocational
training can be the decisive factor in their economic future. The
president has said he wants the United States to lead the world by 2010
in the proportion of college graduates, a position the country had long
held; it now ranks seventh for the 25 to 34 age group. He has also
called for every American to attend a post-secondary institution.
Neither goal will be met if students can't afford the cost.
The administration's plans are "the most fundamental rewriting of
federal student aid policy in 35 years," said Terry Hartle, senior vice
president of the American Council on Education. "These are big changes.
They are painted with a broad brush. . . . It's easy for this to be
overshadowed by health-care proposals, but for many families, these
discussions will be equally important."
Even critics of the plan say the status quo is unsustainable.
Students are amassing debt on a scale that approximates a home
mortgage. The economic downturn has meant rising rates for defaults on
loans, as well as for students dropping out. Private schools face
shrinking endowments, and public universities face state budget cuts.
The tuition crisis has built over many years, however, and until
recently Congress did little to address it. The maximum Pell Grant
award was frozen at $4,050 from 2003 through 2007. When Democrats came
to power, they laid the groundwork for many of the changes on the
table, including raising Pell Grants to the current amount of $4,731.
They also began to curb federally subsidized private loans.
But Obama would go much further. He wants to terminate the private
Federal Family Education Loan program, the primary source of student
loans. Advocates say the move is a formality: The government already
effectively controls the program by guaranteeing the loans, paying a
special allowance to lenders, and in recent months, buying back loans
by the billions from struggling firms.
Shifting all lending authority to the government through its Direct
Loan program would save $94 billion over 10 years, according to the
Congressional Budget Office. Obama would use that windfall to expand
the Pell Grant program, created in 1965 to cover most tuition costs for
low-income students.
<end excerpt> Full at: http://www.washingtonpost.com/wp-dyn/content/article/2009/05/03/AR2009050302251.html
Michael