Fiscally responsible reforms for students, workers and retirees.
FOR IMMEDIATE RELEASE
The GOP Fiscally-Responsible Student Aid Alternative
The Republican-led student aid alternative nearly doubles the overall Pell Grant increase provided by the misdirected Democrat “student aid” bill (H.R. 2669, the College Cost Reduction Act), including a $350 increase in the maximum annual Pell Grant for 2008.
About one-third of the student loan subsidy savings in H.R. 2669 is directed to the most successful student aid program on the books today: the Pell Grant program. Another third is directed toward temporary cuts to certain student loan rates for those who are, by definition, no longer even students. And the remaining third of the bill triggers billions in new entitlement spending. In fact, some of this new spending is not even directed toward students, but rather to institutions like colleges, universities, and philanthropic organizations.
The Republican fiscally-responsible student aid alternative will tip the balance back toward low-income students struggling to pay for their college education by increasing the maximum Pell Grant far more than the underlying bill. The GOP proposal would provide more than $9 billion in new funding for Pell Grants over the next five years.
Specifically, the GOP proposal adopts the same cut to lender insurance rates – from 97 percent to 95 percent – as the Democrat bill, while having the same goal of reducing administrative fees paid to guaranty agencies as well. In addition, the measure would save the federal government $11 billion through lower special allowance payments. With these savings – more than $15 billion in total – the Republican alternative: