Boccieri Votes To Make College More Affordable

Press Release

U.S. Congressman John Boccieri (D-Alliance) late yesterday afternoon voted to restructure the way student loans are given, making them more central to university student loan offices.

"This bill helps eliminate waste in the federal guaranteed loan program, saves money and pays down the deficit, while enabling universities to administer more loans instead of banks," said Boccieri.

Currently, if a student defaults on a loan, taxpayers are on the hook, not the private lender. The Student Aid & Fiscal Responsibility Act (SARFA) reforms the system of federal student loans to save taxpayers $87 billion by switching to the cheaper Direct Loan program. SAFRA will change the way the student loan system functions by originating new loans through the government's Direct Loan program, instead of through lenders subsidized by taxpayers in the current federally-guaranteed student loan program.

Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy. The legislation also directs $10 billion in savings back to the U.S. Treasury to help pay down the deficit.

Opponents say this is another government takeover. Boccieri said, "This is not about favoring the government over private lenders. The government already runs the student loan program. This is about saving money and enabling more students access to higher education."

SAFRA also keeps interest rates low on government-subsidized loans, makes substantial investments in early childhood education, expands the Perkins low-cost loan program to every U.S. college, and simplifies the process of applying for student financial aid.

As the largest-ever investment in higher education, this bill also significantly increases government grant and loan assistance for college tuition payments. Pell Grants, of which more than 18,000 students in Boccieri's district will be eligible for in the 2010-2011 academic years, will increase to $6,900 by 2019 under this legislation. That's because the bill directly invests more than $83 million in the 16th Congressional District to increase Pell Grant Scholarships.

Colleges and universities across Congressman Boccieri's district support the legislation.

Director of Student Aid at Ashland University, Stephen Howell is pleased to learn the House voted to approve the Student Aid and Fiscal Responsibility Act. "This Act is fiscally responsible as it will divert billions of dollars from banks to the tuition bills of students who demonstrate high financial need through increases to the Federal Pell Grant program. Ashland University had 684 student recipients of the Pell Grant in 2008-09," said Howell. "The increased Pell Grant funding will help insure that students from low income families will continue to have opportunities to attend the college that best suits their educational goals. The requirement that all students participate in the Federal Direct Student Loan has other advantages besides saving the government billions of dollars each year. This program will provide stability to the federal loan opportunities for students regardless of the economic climate."
President of Walsh University Richard Jusseaume said the Student Aid and Fiscal Responsibility Act represents a dramatic step forward in the effort to strengthen college accessibility. "At an institution such as Walsh University, 46 percent of our students are the first in their family to attend college and nearly 32 percent are at or below the poverty level. The increased investment in Pell Grants and increased accessibility of the Perkins Loan will have direct impact on ensuring that students will have the resources they need to earn a college education."
Vice President for Enrollment Management at Malone University Brock Shroeder said the legislation will provide increased access to higher education opportunities no matter the economic conditions. "This year, our students have experienced unprecedented financial strain. This legislation will allow our students to access the funds they need. The system we had to work with was not keeping pace with the changing economic climate. This step forward opens the door for more students to America's great higher education system."
Mount Union College Executive Director of Public Affairs and Marketing Melissa Gardner concluded, "This year more than ever before, we have seen many of our families challenged by economic factors that test their abilities to provide a college education for their students. We are encouraged by this act's commitment to providing additional funds for the Pell Grant, thus providing critical financial assistance to our students now and in the years to come."

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