COLUMN: Congress plans to cut programs vital to our financial aid

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by Nick Weller

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The Republican Congress has decided to reduce the deficit by cutting money spent on financial aid to students.

This month Congress plans to cut $10 billion from programs that enable millions of students to attend college.

One out of every two students in this country receives federal aid. If this bill becomes law, many of Rice's undergraduates and graduates will have to find a new way to pay for school.

A week ago, the Senate Labor and Human Resources Committee approved a bill which drastically reduces direct aid to students.

Key portions of the bill include imposing a 0.85 percent fee on higher education loans, capping the direct lending program at 20 percent, raising the interest rate on PLUS loans and increasing the maximum interest rate on PLUS loans.

This bill is a horrible affront to millions of college students. The fee imposed on universities will be passed on to students.

This will make student loans even more encumbering than they are now. Because many students can barely afford to attend college, this increase in fees will price some students out of the market for college.

The Republican plan also will greatly hurt direct loaning. Direct loaning cuts out the middle man and allows a school to loan directly to a student without the involvement of banks. This is a more efficient way to transfer money.

The Republican bill will not allow any new schools to join the program and will force one-third to one-half of the current schools to abandon the direct loan program.

Equally hideous is that the bill seeks to eliminate $700 million from direct loan administration. This will effectively kill the program, according to a national student aid organization.

It would make sense to cut back on direct loans if they were wasteful; however, they reduce bureaucracy, saving money.

Rep. Thomas Petri (R-Wis.), an ardent fiscal conservative, said, "Direct lending is vastly simpler: For example, it has just one lender, fewer department employees overseeing a few large private contractors, all loans automatically consolidated and no multiplicity of agencies for students and schools to deal with."

Reducing the direct loan program does not make good sense fiscally or educationally.

Another Congressional blow to the ability of paying for college is the increase in interest rates on PLUS loans.

PLUS loans are given to parents who have children attending college and usually carry a lower interest rate than bank loans.

Parents across the country use these low interest loans to help send their children to college.

Without these low-interest loans, it will be much harder for them to pay for a son or daughter to attend school.

More disturbing is to see how this bill favors the financial interests of big banks. Of the $10 billion that the Republicans propose to cut, only $3.1 billion will come from the banks or lender agencies.

This places most of the burden on the students who are least able to deal with an increase in financial burden.

This reveals the Republicans true interest -- big banks.

This preference toward big banks shows how Congress is targeting the working class.

For many middle-class people, federal aid is crucial to attending college.

I know that without the direct loan program, many of my friends and I would not be able to afford the cost of attending Rice.

It is of the utmost importance that Rice students realize that this bill will place a substantial financial burden on them and that they must act to help stop this butchering of student aid.

A trend to place the interest of banks above the welfare of the country is also revealed by the bill.

With the multitude of problems that the United States faces, it is important to recognize that education is one of the universal ways to help solve our country's problems.

Politicians need to realize that it makes no sense to cut education. We must encourage as many students as possible to attend college, and we need to make the process as easy as possible.

Newt Gingrich's and Phil Gramm's educations were both made easier by federal student aid. They now want to cut these federal aid programs and not allow current college students the same opportunities they had.

It seems that politicians have lost sight of the people they are supposed to be representing.

Now that many of the politicians have gotten through school they think that it is acceptable to cut student aid.

Students must make sure that politicians realize that this is wrong. We must use our collective voice to speak in favor of student aid.

It is up to students who will be affected by these cuts in loans to take action.

Call 1-800-574-4AID and tell your congressperson and senators how important these loans are to the future of American education.

Only if enough students speak out can we help guarantee that money is available to pay for education.

Nick Weller is a Brown College freshman and member of the Rice Young Democrats.

This item appeared in the Opinion section of the October 13, 1995 issue.

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