U.S. House passes bill to expand Pell Grants, eliminate private lenders

Rightardia comment: Wirehead, our technical editor, worked for a telemarketing boiler room operation that provided and refinanced student loans. The owner was a right wing Republican who contributed lots of money to the GOP. He had pictures of himself with Rep. Ric Keller, 8th Congressional Distict, and Rep. John Boehner on a large LCD TV Powerpoint presentation in the sales center.


Keller, who was defeated in the last election, was on the House Education Committee. The owner also attended luncheons with Rep. Gus Bilirakis, Florida's 9th Congressional District.


When the Democrats took control of Congress in 2008, they changed the law on student loans when federal investigators uncovered corruption involving college financial aid offices and private lenders. At one time the senior managers were making more than $5,000 a month until the Democratic Congress changed the law to counter the student loan corruption.

During sales meetings prior to the election, the owner would proselytize for the GOP. It didn't help in the case of the presidential election. Obama swept most of the counties in Central Florida. The owner considered himself a politico and even tried to sue the Federal government when it changed the law on students loans. Now the Congress wants to finish the job with the Pell Grant program. Rightardia hopes Nancy Pelosi is successful.

In Print: Friday, September 18, 2009

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Low-income students won a victory Thursday as the U.S. House of Representatives approved an expansion of the popular Pell Grant program.

They might also see the transformation of the federal student aid landscape if a version of that bill makes it through the Senate.

Under the Student Aid and Fiscal Responsibility Act approved in the House on a mostly party-line vote, lenders like Sallie Mae and Bank of America would be cast to the sidelines in the federal loan process. Students would apply directly for aid under the federal government's alternative Direct Loan Program rather than working with banks as middlemen.

Supporters of the change say it would save $87 billion over the next decade by eliminating federal subsidies to private lenders. Nearly half the savings would be used to expand Pell Grants.

The bill would also expand aid to community colleges, expand the Perkins Loan program and simplify the FAFSA aid forms.

"This will save us money," said Rep. Kathy Castor, D-Tampa, a co-sponsor of the bill. "We're going to plow a lot of money back into making college more affordable. And we're also going to plow $10 billion back into the U.S. Treasury to help pay down the federal deficit."

The changes would also mark a final chapter in the student loan scandal that began in 2007 after state and federal investigators uncovered a string of kickback schemes involving college financial aid offices and private lenders.

Castor said private lenders "made a mockery" of their claim that competition would bring lower interest rates, with students often paying higher-than-market-value rates and lenders wasting federal money on efforts to win business at colleges.

She said the expanded Pell benefits would bring more than $106 million in additional aid money to students who live in her Tampa Bay district, adding new recipients and potentially pushing the maximum grant from $5,350 to nearly $7,000 a year by 2019.

See the rest of the story at http://www.tampabay.com/news/education/college/us-house-passes-bill-to-expand-pell-grants-eliminate-private-lenders/1037143

Tom Marshall can be reached at tmarshall@sptimes.com or (813) 226-3400.


[Last modified: Sep 17, 2009 11:05 PM]

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