Thursday, July 12, 2007

House Passes College Cost Reduction

It passed by a pretty awesome margin. It will be interesting to see what kinds of compromises are made between this and the Senate bill. I would be surprised to see Bush make good on his threat to veto but he's already the most unpopular president in history so why not take this chance to stand up for his principles (like helping bankers)?

House Passes Single Largest Effort to Help Students Pay for College since GI Bill

Bill Would Boost Scholarships and Reduce Student Loan Costs at No New Taxpayer Expense

WASHINGTON, D.C. – By an overwhelming vote of 273 to 149,he House of Representatives approved legislation today that would do more to help students and families pay for college than any federal effort since the 1944 GI Bill. The legislation comes at no new cost to U.S. taxpayers.

The legislation, the College Cost Reduction Act of 2007 (H.R. 2669), would boost college financial aid by about $18 billion over the next five years. The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $19 billion. It also includes nearly $1 billion in federal budget deficit reduction. The Senate is expected to vote on similar legislation this month.

“This bill is a remarkable step forward in our efforts to help every qualified student go to college,” said Rep. George Miller (D-CA), chairman of the Education and Labor Committee and author of the legislation. “With this bill, we are saying that no one should be denied the opportunity to go to college simply because of the price.”


Devin said...


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Unknown said...

The problem isn't the cost of college, the problem is that students major in completely worthless degrees.

Parents should force their kids to major in something with a future in the job market, then paying back loan would be easy.

I don't like the idea of the government paying for theater majors to complete their degrees.

Anonymous said...

All more government money for college education will do is raise the price of tuition even higher. If the organizations granting the loans evaluate the application with the person's educational intent in mind and can accept/reject their application based on their intended major/choice of school etc...

If the applicant gets a free pass to major in theatre arts or urban studies or other majors where there isn't a logical payback, then it's just stealing from those who chose a lucrative major. Just another call for society to make life easy for people who want everything but don't want to sacrifice for it.

I would have loved to have been a history major but didn't want to teach and figured I can be an accountant and buy history books to read for pleasure. That's life - it should be a trade-off.

Anonymous said...

Good luck. If you think you're going to have a program where you can borrow money and in 10 years be forgiven if you don't pay it back you'll find that sooner or later the supply of funds will be constricted. There is no free lunch and no amount of government tinkering will be able to regulate a free market.

Take a look at energy. When the government started regulating energy in the 70's the supply went down not up.

I also fully agree with people who say that we shouldn't be paying for students to major in Art History and not be responsible for paying back the money.

Just another reasons why so many people look down on GenX,Y,Z. Nothing but a bunch of woosies who want someone else-in this case the government to solve their problems.

Take responsibility for yourselves. If you borrow $50,000 to get a degree in Theater and you can't pay it back its your decision and don't go crying to someones else to bail you out.

Anonymous said...

I disagree with Ms. Kamenetz's comment that "it is only right that those (graduates) who earn more from their educations should pay more back." This kind of thinking smacks of irresponsible socialism, where "each according to their resources and needs" and "I'm not responsible for my own decisions". It also could encourage students to borrow more than they could normally afford to pay back after graduation, besides nurturing the belief that one is "entitled" to such forgiveness the rest of their lives. Look, you want to go to an expensive school and can't afford it? Take some time and responsibility to figure out what your chosen career will allow you to afford in loan repayment and adjust accordingly. Loan forgiveness for low income graduates while making higher income graduates pay their's back in full is just blatantly unfair.

I'm all for making college more affordable, but this kind of excessive loan forgiveness for low-income graduates just goes too far. Yes, let's help out those who nobly choose social work or other lower-paying careers, but let's use the 'hand-up' approach rather than the usual 'hand-out'. No one forces current college students to incur massive loan debt. If their debt is "out of whack with their income" (her words), maybe some forethought as to what their obligations would be could have prevented their troubles.

"Someone" pays for lunch and as usual, it will be the US taxpayer if this insane provision is passed, reduced subsidies to lenders or no.

Anonymous said...

Wow some people just don't get it
We all lose if people start foregoing education because of costs. Pretty soon the average debt of graduates may equal their initial salaries which is ludicrous. People will stop going to college. Education is a public/private good. If we DON'T start subsidizing it more, we will lose out to China/India and Europe who HEAVILY subsidize their college students. We can either have the government pay for education directly, or we can do it the loan route. This is NOT a free lunch. Only people with the very lowest incomes will actually pay less. People who obtain graduate degrees and have high earnings will end up paying the same as they do now.

So we can either subsidize education..or take the risk out of it by offering such a buffer as is not fair for the individual to bear the entire costs of education if public as a whole benefits i.e. more productivity..increased tax receipts. Another way to look at it is our productivity and tax revenues will go down in the future if we don't revamp the system and help the taxpayer will end up payign anyways..either through this..or decreased tax revenues in the future if students feel threatened by the costs of higher education

Anonymous said...

One other thing is someone complained that the higher salaried persons will be subsidizing the loan repayments for lower income students. That is not wholly correct. People in social services are just as IMPORTANT to society as MBA's earning 100+ k a year..the reason is public servants such as social workers allow our society to function in an orderly fashion and keep things together. if you decrease the amount of these people, crime will increase, more poverty will ensue, etc..and the business climate will be negatively impacted. I am sure crime would also skyrocket. We can either keep an orderly society..or just watch as our jails fill up even further..and we have to subsidize inmates room, board, and healthcare for many years.

Anonymous said...

Social workers don't keep the fabric of our society together, idiot.

MBAs earn the tax receipts to fund the education so people DO NOT become social workers.

College is an investment, just like any other product.

Kristopher Craw said...
This comment has been removed by the author.
Kristopher Craw said...

I've seen a lot of debate on the blogosphere about this particular bill, but very little analysis of it.

Personally, I support the bill, but I am wary of the increase in tuition expenses this bill has the potential to create. There are two measures designed to help mitigate this, but they are far from foolproof.

It is a good bill, but it also depends on a few complicated interactions in order to meet the end goal of making college more affordable for the poor and middle class. A general rule of thumb is that the more complex a system, the greater the likelihood of failure.

I posted a lightweight economic analysis of the bill here.

vishal said...