The US House of Representatives recently passed a bill that cuts $2.2 billion in vital funds needed to administer federal student loan programs. The bill also outlines several other measures that will impact college students and their families, including caps on Pell Grant awards. The Pell Grant is the largest grant program which is awarded to undergraduate students and based upon financial need. Many students from a low income background would not be able to attend college without the Pell Grant awards. The grant awards vary in amount from $400 to $4,050 per student. Currently the maximum Pell Grant a student can receive is $4,050 per year. Despite the usual cost of living and inflation increases congress has decided not to raise this limit for the fourth consecutive year. Initially the House had promised to increase the maximum Pell Grants for low-income students by $100. Tom Kiley, spokesman for Rep. George Miller (D-Calif.) expressed his disappointment with the bill in regard to the Pell Grants for low income students “Once again, we missed an opportunity to raise the Pell Grant,” Kiley said. “That is a glaring omission.”

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While most college students were on winter breaks, the US Senate was debating over a drastic reduction in student loan opportunities. On December 21, 2005 in a 51-50 vote the US Senate passed a bill which included $12 billion in student loan cuts from the federal budget. Vice President Cheney cast the tie-breaking vote, while five Republicans sided with the Democrats who unanimously opposed the bill. A second blow was wielded this week when the House passed a bill also in favor of the student loan cuts. While 13 moderate Republicans joined House Democrats in a no vote, not enough opposition was gained and the bill passed 216 to 214. The drastic measure eliminates $2.2 billion in critical funds used to administer the federal student loan programs. Additional changes included a new 1% insurance fee that student borrowers must pay to guarantee agencies and raising the interest rate cap for parents who take out federal education loans for their children from 7.9 percent to 8.5 percent. The bill outlines a total of $39 billion in budget cuts which besides the student loan cuts, drastically reduces Medicaid and Medicare programs for low income and senior Americans. “The President spoke last night [...]

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WASHINGTON, DC – Members of the House Democrat’s 30-Something’s working group were troubled by the President’s dismissal of the $12.7 billion student loan cut in the Republican budget at a Kansas State University Q&A earlier today. Keep Reading: Bush forced to answer for large student loan cut in Republican budget

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Categories: General