ADVOCATING AID FOR STUDENTS—Higher Education Advocate Luke Swarthout speaks with the media after the Senate voted to increase student aid.

Congress Ahead Of The Curve On Student Aid

It was January 2006, and the federal government’s role in helping more Americans afford a college education was a top priority on the congressional agenda—for all the wrong reasons.

In order to finance tax cuts that would largely benefit the wealthiest Americans, congressional leaders were desperate to find money to cut from the federal budget. Aid to college students took a big hit: Of the $35 billion in cuts proposed, $12 billion, more than one-third of the total, came from federal student loan programs.

Fast-forward to July 2007. In a bipartisan vote, the U.S. House voted to lower interest rates on student loans for low- and middle-income families by cutting billions of dollars in subsidies to private banks.

The dramatic turnaround was due to many factors, including response to a nationwide campaign led by our staff and fueled by the support of our members.

Here is a quick description on how we have been working to make college more affordable for students.

Part I: Research
In July 2006, our Higher Education Advocate Luke Swarthout and other staff released city-by-city reports, detailing how student loan borrowing has increased, on average, three times faster than consumer spending.

As health care and housing costs continue to rise, we documented that recent graduates are having a harder time balancing their debts with other core expenditures.

In another study, we showed how the growing debt carried by many students can diminish their career opportunities. For example, we found that 23 percent of four-year public university graduates cannot afford to live on a teacher’s salary because of their high debt levels.

Part II: Organizing
Because our research made headlines across the country, we were able to kick our organizing into high gear. We helped bring together a coalition of our allies and mobilized students and faculty on college campuses, including the 100 campuses with PIRG chapters, to e-mail or call their members of Congress.

A proposal supported by Arizona PIRG was introduced that would cap the amount of income that recent graduates need to devote to loan repayment at 15 percent. By the time Speaker Pelosi put together her 100-hours agenda, we had made a strong case for making student aid a high-priority.

Part III: Advocacy
In early January 2007, House leadership proposed to lower interest rates on subsidized Stafford student loans from 6.8 percent to 3.4 percent over the next five years.More than 5 million students receive subsidized Stafford loans every year, and the interest rate reduction would save millions of borrowers thousands of dollars over the life of their loans. The bill paid for lower interest rates by slightly cutting the subsidies that banks receive to make student loans.

Shortly after the plan was announced, Arizona PIRG released a report analyzing its impact.

The Chairman of the Education and Labor Committee, George Miller, circulated a letter to all members of Congress encouraging them to read the PIRG report.

Then, early this year, riding a wave of national attention and growing public concern, H.R. 5, the House bill to lower interest rates, passed by a vote of 356 to 71.

Victory
Passage of the House bill was an important step, but Arizona PIRG has continued to work with congressional leadership to pass more comprehensive debt reduction measures. This summer, The U.S. House of Representatives passed the “College Cost Reduction Act of 2007.” The bill will substantially increase the purchasing power of the Pell Grant, the nation’s premiere need-based grant program. It will also cut the interest rate on student loans in half, to 3.4 percent, by 2012.