Higher education legislation

The new federal higher-education legislation, brainchild of President Barack Obama and authored by Rep. George Miller, D-Calif., is a beneficial situation for students from all backgrounds.
The legislation will eliminate direct lending between higher-education institutions and banks and instead have colleges and universities administer aid directly from the federal government — thereby freeing up $87 billion over 10 years, according to the Congressional Budget Office . Instead of rewarding banks for risky student-loan policies with government subsidies, the bill would put the money saved into the Pell Grant and Perkins loan funds, which will make more students eligible for the favorable loans and grants.
Indeed, the Student Aid and Fiscal Responsibility Act of 2009 is commendable. The Federal Pell Grant has been unable to keep up with tuition increases across the nation. The Project on Student Debt calculated that in 1975-76, the maximum Pell Grants were able to cover 84 percent of the cost of a four-year public education. Now the maximum Pell Grants only cover 35 percent of that cost. This bill will fix mandatory Pell Grant increases to inflation, plus one percent — a small favor in that context.
Republicans are arguing that the bill will give the government a monopoly on the student loan industry. The Washington Post quoted Rep. John Kline, R-Minn., positing this uninspiring, Red-Herring: “I have to ask: is there any industry not on the verge of federalization?”
Kline and his colleagues are defending systemic cruelty toward college students, propped up by corporate subsidies for an industry which, not too long ago, was found to be in part a veritable criminal enterprise. This bill is a small step in freeing some college students from some amount of indebtedness. But it should be passed with the qualifier that the value of higher education is still plummeting while its cost continues to rise rapidly.