Congress' debate deepens over Republican College Access Bill

Black Issues in Higher Education, June 17, 2004 by Patricia Troumpoucis

The debate over the reauthorization of the Higher Education Act is deepening between Republicans and Democrats in the U.S. House of Representatives as they focus on student aid--specifically student loans and Pell Grants. Democrats say the changes Republicans recently proposed in a new bill won't increase college access for low-and middle-income students, as Republicans contend, but will have the opposite effect.

Introduced by the House Committee on Education and the Workforce Chairman John Boehner, R-Ohio, and Rep. Howard P. "Buck" McKeon, R-Calif., the College Access and Opportunity Act would wrap up the renewal of HEA and calls for moving from a fixed rate student-loan consolidation to a variable rate. It also proposes removing the 6.8 percent interest-rate cap for student loans, which would go into effect starting in 2006.

"Moving from the fixed rate on loan consolidation to a variable rate is very costly to students, where a fixed rate would be advantageous to them," said Rep. Dale E. Kildee, D-Mich. That measure alone, Kildee said, could cost students an additional $4,000 or $5,000.

Kildee said eliminating the 6.8 percent interest-rate cap would also drive up the cost of student loans.

"These students would again be paying more. It would be additional interest payments over the life of the student loan," Kildee said. "Those two things are serious problems we have with the bill."

Rep. George Miller, D-Calif., said the bill fails students and their families in several ways.

"The Republican bill forces millions of low- and middle-income students to pay thousands of dollars more for their college loans, caps the maximum Pell Grant, and fails to provide meaningful relief from soaring tuition, just as students continue to struggle to meet rising college costs," Miller said. "Instead of yet another raid on the pocketbooks of students and their families, we should be investing federal resources to make college affordable."

At a hearing on the bill May 12, Boehner said by applying variable interest rates to consolidation loans, about $21 billion would "free up" during the next seven years.

"If consolidation loans are left on autopilot, the cost to low- and middle-income students will be $21 billion in lost opportunities," Boehner said.

But Kildee said such changes would only serve to discourage some students as they consider pursuing a postsecondary education, possibly deterring them from attending college at all.

"They see how much this will cost them, and they see that they can't consolidate their loans at a fixed rate," Kildee said. "All these things go into the decision-making process. A fixed rate gives you some encouragement ... and then when they take the cap off the interest rate--the cap of 6.8 (percent)--the students have no idea what interest rate they'll be paying then."

Another problem with the bill Kildee said, is its treatment of the Pell Grant and how it suggests extra aid for low-income first- and second-year students through the State Scholars Program. There's a real danger in trying to expand or change Pell to provide grants based on merit, Kildee said.

Alexa Marrero, press secretary for the House Committee on Education and the Workforce, said the debate is ongoing, and there will be more hearings in the near future, although no official dates have been set.

Kildee said he's hopeful that House Republicans and Democrats will strike a compromise that's in students' best interests.

"I think we can work out our differences and move (toward) a bipartisan bill," he said.