Major Student Loan Bill Finally Approved

Angela Januzzi

September 7, 2007 

Over two months after it passed through the Senate, the most controversial education bill seen in recent years has been approved today by both houses of Congress.  

The bill would cut government subsidies to lenders and loosen the limit of aid to needy students, and Education Secretary Margaret Spellings is encouraging President Bush to sign his approval for that reason. However, the measure is seeing criticism from those who believe the cuts to lender subsidies are too dramatic—and will only result in lower service quality from lenders, rather than benefit students as intended. 

Major points of the bill include an increase in the aid received through the Federal Pell Grant (from $4,310 to 5,400 over the next three years), to its slicing of subsidies to loan companies (by $20million dollars). While lenders argue the cuts will only push companies out of business, thereby reducing competition and overall industry quality—supporters of student interests still rebuttal with the point that, loan companies, regardless, no longer have strong credibility in the eyes of those receiving the loans.