New legislation HR 3221, The Student Aid and Fiscal Responsibility Act, will be considered by the House of Representatives this week, according to the Committee on Education and Labor Web site.
There are many goals to this legislation including everything from elementary education reform to a change in higher education loans.
Lawmakers hope this legislation would get more students prepared for and into college, and would keep them in college at a more affordable price once they get there.
Debt obtained from college loans and retention rates are at a record high; 30 percent of American students are dropping out every year, U.S. Secretary of Education Arne Duncan said in a conference call.
They hope to increase accessibility to college by “significantly increasing” the Pell grant funding, with an average of $800 more per eligible student every semester.
This funding would grow more and more each year, Duncan said.
Officials also plan to change the way student loans work by switching to a private-public system, which would allow the federal and private programs to work together, according to the committee’s Web site.
The William D. Ford Federal Direct Loan Program, more commonly referred to as “Direct Loans,” is a U.S. Department of Education program that offers low-interest loans for students and parents in order to pay for college.
As opposed to other loans distributed through a bank or other financial institution, the lender is the Department of Education, meaning that students borrow directly from the U.S. Government, according to the department’s direct loan website, dl.ed.gov.
Congressman George Miller, D-Calif., said in a conference call he believes schools can make the direct loan transition easily. Penn State made the transition in four months, he said.
It’s estimated by the Congressional Budget Office that the likely net cost to taxpayers would be about $6 billion over ten years.
It is also estimated that the act would cost an additional $33 billion and that the cost of expanding Pell grants could be almost $11 billion greater than initially estimated.
The program was intended to expand federal programs while allotting $10 billion to deficit education, but it is argued it will instead result in a $50 billion loss, according to the budget office.
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