Senate Set to Consider Student Aid Reform
San Francisco, California: Student leaders and campus administrators today voiced their support for the Student Aid and Fiscal Responsibility Act, (SAFRA) and called for the Senate to take action to pass the student aid legislation promptly. The Bill, which would cut government waste and make college more affordable for hundreds of thousands of students, in part by increasing funding for Pell grants, could be voted on in the Senate within weeks.
The bill would move student loans from the wasteful FFEL program into the more efficient direct lending program, eliminating millions of dollars of unnecessary government subsidies to banks which lend to students. “The move from FFEL to direct lending is just common sense” said Saffron Zomer, Program Director for CALPIRG. ‘There’s no rationale for continuing this wasteful giveaway of taxpayer dollars.”
The consequences of failing to move forward with student aid reform could be dire. 500,000 low and middle income students would lose their Pell grants, and another 8 million see their awards cut by 60%. “Community College students have already seen the state budget balanced on our backs’ said Reid Milburn, President of the Student Senate for California Community Colleges. “With our budget in crisis, Cal Grant under threat, and tuition hikes, Pell grants are more important than ever.”
In response to a multi-million dollar lobbying campaign by the student loan industry, scrambling to protect their handouts, some Senators have been opposing SAFRA. Switching from the FFEL student loan program, which subsidizes banks, to the more efficient direct lending program, will reduce the deficit and enable a historical investment in student financial aid. Student activists planned actions on campuses around the state today to call Senator Feinstein and ask for her continued support for students over banks.
“This federal legislation offers a unique opportunity to use billions of dollars annually which have been primarily reserved to fill the pockets of banks and other lending authorities, to support lower-income students and the institutions that serve them. Not only would these funds be used to increase Pell Grants and Pell Grant opportunities, but through other programs within the SAFRA Bill students would benefit indirectly through funds being provided to colleges and universities for much needed courses, programs and other student services created to expand student access and completion rates.” Said F King Alexander, President at CSU Long Beach. “We can no longer afford to be the only OECD nation in the world that believes that higher education public policy should balance the increasing educational needs of its students with the need to protect the risk-free profits of its banks.”
“This isn’t a done deal, of course’ said Jesse Cheng, Student Regent for University of California. ‘Senator Feinstein has been a supporter of higher education – I hope she’ll continue her support for SAFRA.’ Zomer agreed. ‘We need Senator Feinstein’s leadership on this.’ She said. ‘We’re calling on Senator Feinstein to prioritize students over wealthy banks and get SAFRA passed.’
Via CALPIRG – California Student Public Interest Research Group