US senate’s stimulus bill would cut student loans

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US senate’s stimulus bill would cut student loans

By Allison Bush
The State News
Published: February 8, 2009

Students will get a significantly smaller cut of the proposed economic stimulus package than originally planned if the U.S. Senate’s revised version of the package is passed.
After the U.S. House of Representatives approved an $819 billion package on Jan. 28, the Senate is expected to vote on its $827 billion version early this week.
One difference between the House and Senate versions is the House bill would provide $2,000 more annually to students who receive Stafford loans, while the Senate bill would not.
State Rep. Mark Meadows, D-East Lansing, said he supports increasing the annual loans provided to students.
“The reality is that a better educated work force is going to provide us with more stability in the economy,” Meadows said.
“We should do everything we can to get people into … some post-high school education, and this would go a long way toward doing that.”
Although U.S. Rep. Mike Rogers, R-Brighton, voted against the House bill, he has supported efforts to make sure families have access to college education funds, said Sylvia Warner, Rogers’ press secretary.
Warner said Rogers voted against the stimulus package because he thought there were too many funds devoted to measures that would not stimulate the economy.
Senate objections to the increase in funding for student loans are probably fueled by the fear that the increase would be permanent, MSU assistant political science professor Matt Grossmann said.
The purpose of the stimulus package is to put the money into the economy once, and a permanent change goes beyond that purpose, Grossman said.
“It’s not a small change we could reverse three years later,” he said.
Although the Senate bill lacks Stafford loan funding, it does include an increased maximum amount available for the Pell Grant program.
The original House proposal would increase the Pell Grant maximum by $500 over one year, while the Senate proposal would increase it by $681 over two years.
The Pell Grant is a need-based grant for independents whose income is below the poverty level.
Meadows said although the increasing grant amount would help students, it is not the ideal program because only the neediest students will qualify for aid.
“You have to be below poverty level to qualify, and that’s pretty tough,” he said. “But in the long run, that’s money that’s put right into the economy.”
Warner said that she could not comment on the higher education funding differences between the House and Senate bills.
“The handicap we have is that we have not seen the Senate bill,” she said.
“It’s a work in process yet, and it’s a little difficult to comment on something that is in there.”
After the Senate votes, the package likely will go before a conference committee until members reach an agreement on a modified version.
The bill will then return to the Senate and House floors for a full vote. The package could be approved by mid-February, Grossmann said.

Published on Sunday, February 8, 2009