The U.S. Senate is considering a new version of the Higher Education Act with potentially broad implications for the Bowdoin community. This new version calls for widespread changes to the previous version of the act, including fixing interest rates on federal student loans while at the same time increasing the maximum size of Pell Grants, the primary form of federal education grants.
A stipulation in the bill, referred to as the fair share provision, requires redistributions of money from a federal fund called the Supplemental Education Opportunity Grant (SEOG). Currently, this money is allotted to colleges and universities using the age of the institution as a guide, not by the number of students that attend it.
If the bill is approved, Bowdoin would lose roughly $85,000 in funding, according to Director of Student Aid Stephen Joyce. While this does not necessarily mean less aid for students, it could mean a reduction in the budget, said Joyce.
The new version would change the allocation to reflect geographical distribution of students, reducing the aid available to Bowdoin students. "We've come to depend on this funding and it would be a significant blow to the Northeast to have this disappear," Joyce said.
"The hurt is going to be on the college budget," Joyce said. "It might mean slightly higher loans for students; it might be that we find the grant money somewhere else, but if we do that some other part of the college isn't getting the money." Referring to the redistribution, Joyce says, "It's not alleviating the need and it's not creating any more funding. It's just rearranging the deck chairs on the Titanic."
In a process called budget reconciliation, the Senate has been required to come up with approximately $13 billion from its Committee on Health, Education, Labor, and Pensions. To do this, committee leadership tried to devise a plan reducing spending on the Higher Education Act without negatively affecting students at colleges and universities. The key to the plan is reducing government payments to the banks that provide student loans at low interest rates and reallocating some of the money saved to a new grant program called Pro-GAP, or provisional aid program.
According Joyce, if the new version of the act passes, it will essentially fix a problem with the way the government makes payments to banks that give student loans.
"They've actually been bundling these loans in such a way that they're getting more fees than they realize they should," Joyce said. "That's what the Senate is tightening up on, and that's where they hope to realize most of their savings. If they do that, then the actual provisions of the bill won't be quite so draconian."
Pro-GAP included in the bill would also benefit students. According to a statement released by Massachusetts Senator Edward Kennedy, a major proponent of the changes, these grants would provide an additional six billion dollars in aid specifically for low-income students. Another change affecting students is an increase in the limits of federal loans held by one student. Joyce supports these increases, saying that federal loan limits force students to seek alternative, higher-interest loans.
Student activist groups have been mobilizing against the changes. Sara Schlotterbeck '08 represents Student Public Interest Research Groups (Student PIRGS), a group that organized a call-in to congressional representatives in opposition to the bill.
"Congress constantly cuts student aid because we don't have a unified voice against it. With this big cut in student aid that's being proposed, people decided to take action," she said.
According to Schlotterbeck, Student PIRGS is encouraging students to oppose the entire federal budget because of cuts to both education and the environment.
Among the changes that Schlotterbeck's group opposes are changes in the interest rates of certain student loans. Currently, interest rates for federally-subsidized Stafford loans are allowed to shift as the economy fluctuates. The new bill calls for a fixed rate of interest that is higher than the current rate. According to Jasmine Harris, legislative director for the United States Student Association, a student lobby group, these changes could cost the average student at a public university up to $5,800 more than today.
While acknowledging positive aspects of the bill, Joyce stands against any forms of cuts to the Higher Education Act.
"There's not enough money in any of these programs to meet the need," he said. "If we were in a good economic environment, we would be trying to expand," he said.
In the meantime, the House is considering an alternate form of the bill currently in the Senate committee. Although many provisions of the alternate bill hold the same, other changes in the House bill include a measure penalizing colleges that raise their tuitions at higher than double the inflation rate, raising additional loan limits, and a resolution affirming an academic bill of rights, a statement in favor of diversity and free speech in schools.
When asked about the changes, Timothy Gamwell '09 said he was troubled by the overall cost of education. "It's outrageous, the price of education. It's gone up so much," he said. However, he said that he would not be forced to give up a college education. Referring to the changes, he said, "It wouldn't keep me from going to school. I'd still try to find a way to go to school. It would definitely force me to look into alternatives, private loans, different ways of paying."