As Congress passed the historic health care legislation this weekend it also overhauled America's student loan program.
In a substantial improvement in college student lending practices, congress approved President Obama's plan to eliminate a $60 billion private student loan program, replacing it with government lending to students at fixed and lowered interest rates.
The Rainbow PUSH Coalition congratulates President Obama for making student debt relief a priority. He has summed it up by saying, “a student should not go broke going to college.”
House Democrats attached a student aid initiative to their final amendments of the health-care bill that would overhaul the student loan industry.
According to the nonpartisan Congressional Budget Office, by eliminating the "private lender middleman (who often gouged students with high interest rates and penalty fees), the student loan bill would generate $61 billion in savings over 10 years. It is estimated that $36 billion in savings will go toward increasing Pell Grants.
After its launch in 1973, the Pell grant covered two-thirds of a student’s cost who attended a public university. Today grants only cover approximately one-third. "We've gone from education as an investment, to education as a commodity. Many students today cannot afford to continue their college education. Those that do are saddled with guaranteed student loan debts, with no guaranteed job," said Rev Jackson.
Savings would also be spent to increase funding for community colleges and historically black colleges and universities.
For the last several years Rev. Jackson and Rainbow PUSH have campaigned to "reduce the rate" on college loans. "Our global competitors are gaining productivity by investing in higher education. We must do the same. The recession will end with innovation not just expanded unemployment benefits.”
The Rainbow PUSH Coalition has called for interest free student loans. The administration supports ending subsidies to private lenders in favor of increased Pell grants and a 10,000 tax credit. Still more needs to be done. Students around the nation are marching against budget cuts and to defend their right to an affordable and accessible college education. We must continue to fight with them for progressive and fundamental change.
The Rainbow PUSH Coalition is a progressive organization protecting, defending and expanding civil rights to improve economic and educational opportunity. The organization is headquartered at 930 E. 50th St. in Chicago. For more information about the Rainbow PUSH Coalition, please visit www.rainbowpush.org or call (773) 373-3366.