The House of Representatives approved a bill last week that calls for major changes to the nation’s student aid program, including a provision that would push private lenders from the student loan sector.
The Student Aid and Fiscal Responsibility Act (HR 3221), which was passed by a vote of 253-171, would provide for higher Pell Grant scholarship funds and lower interest rates on need-based federal financial aid.
The bill also implements greater government involvement in the federal loan program, according to the House Web site.
Under the new bill, the government would be in charge of all federal loans, resulting in a savings of $87 million for taxpayers, according to the Congressional Budget Office.
Furthermore, the act would eliminate the subsidized loan program for private loan companies, although private lenders will still be able to give loans, according to the House Web site.
However, the bill would prevent these transactions from being made with taxpayer funds, according to The Associated Press.
“This legislation makes important investments to help make college affordable and accessible for all eligible students,” said Melissa Salmanowitz, spokeswoman for the Education and Labor Committee, which sponsored the bill. “It will help us transform our student aid programs so that they finally operate in the best interests of students ““ not banks ““ and help relieve the burdens of overwhelming debt.”
In addition to these provisions, the bill also calls for the simplification of the Free Application for Federal Student Aid form.
Compiled by Samantha Masunaga, Bruin senior staff.