What have the Democrats got against Pell grants?

Pell grants are money for poor students and Democrats make a great show of caring for the poor so they should be all for the Pell grant program, right? Wrong! The Pell grants have been allowed to decay into near-uselessness while ever more complex bureucratic schemes to "aid" students have been devised. Just giving poor kids fee money does not give the bureaucrats enough of that lovely CONTROL, apparently. Press release below from Rep. Howard P. "Buck" McKeon (R-CA), senior Republican member of the Congressional Education and Labor Committee

Congressional Democrats yesterday rejected key Republican proposals to make college more affordable, instead proposing complex new entitlement and loan benefit programs. In closed door meetings, Democrats assembled a legislative proposal that creates new benefits for college graduates, new spending on institutions, and an untested student loan auction that eliminates parental choice in selecting a student loan provider. Republicans had advocated a straightforward investment in the Pell Grant program in order to provide assistance to low-income students.

"This year, Congress had an historic opportunity to reform federal student aid programs. Yet when presented with a choice between low-income students and big government spending, the Democratic majority put special interests above student interests," said Rep. Howard P. "Buck" McKeon (R-CA), senior Republican member of the Education and Labor Committee. "The Democrat proposal sets program participants up for failure, imposing impossible deadlines for implementation of complex new programs and policies."

"Seven months ago, the Administration helped put us on this crash course by proposing misguided policies that threaten the stability of our nation's financial aid system," continued McKeon. "Then, rather than embracing House Republicans' straightforward approach to reform - making the student loan program more efficient and plowing available resources into Pell Grants - Congressional Democrats made things even worse as they added billions in additional program cuts and went on an entitlement program spending spree."

McKeon has championed efforts to increase college affordability by increasing Pell Grant funding while holding colleges and universities accountable for skyrocketing costs. Since 2003, he has backed proposals to increase transparency in college costs in order to protect and inform consumers. At the same time, he has called for reforms that would generate billions in savings from the federal student loan programs and reinvest them in the Pell Grant program, which serves low-income students.

After weeks of negotiations that excluded Republicans, Congressional Democrats last night released a final conference agreement that misses several key opportunities to strengthen the Pell Grant program and assist students and families. The bill:

* Diverts nearly $9 billion that could have been spent on Pell Grants in order to provide temporary interest rate reductions and complex new repayment benefits to some college graduates, as well as to create new programs that allocate funds to institutions and philanthropic organizations instead of low-income students;

* Fails to provide Pell Grants for students attending college on a year-round basis, creating a particular hardship for nontraditional students;

* Denies parents and students access to more information about college costs; and

* Imposes a complex auction mechanism to limit options for parents seeking low-cost loans to help their children pay for college.

The agreement reached by Democrats calls for a temporary phase down in the interest rate charged to some graduates repaying their loans. The plan falls far short of the promise Democrats made during the 2006 campaign to cut interest rates in half, rendering the claims of proponents that students would save $4,400 meaningless. Indeed, not a single borrower would be eligible for the halved interest rate for more than a single year of college. Moreover, if Democrats were to enact future legislation to extend the 3.4 percent interest rate - half the current 6.8 percent rate - to make good on their promise, it would cost taxpayers an estimated $20 - $30 billion.

Democrats also included in their proposal a radical plan to force parent borrowers to choose between just two lenders selected on the basis of an auction. The untested proposal would institute at least fifty separate auctions, one in each state, every two years to determine which lenders parents would be allowed to work with to take out low-cost federal loans to help their children pay for college.

The Democrat agreement creates a complex new loan forgiveness program for borrowers working for 10 years in the government, other public sector fields or at a nonprofit organization. In order to receive this benefit, the borrower must be in the Direct Loan program. A similar benefit is not available to similarly situated borrowers in the FFEL program. This new program also deliberately excludes teachers at private schools, while including other educators.

"The one positive feature in the Democrat-negotiated reform package is the increase in Pell Grant funding, heeding the calls of Republicans to increase support for this critical program," said McKeon. "While I wish the Democrats had adopted the Republican proposal to invest all the savings from this bill in the Pell Grant program, I'm pleased to see that progress was made on the most fundamental component of this bill - the investment in today's college students."


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