The House of Representatives passed the College Cost Reduction Act on July 11. The act is designed to cut college costs by increasing federal financial aid. It would reduce the amount of subsidies the federal government pays to lenders, and that money would be put into federal financial aid. Supporters of the act say it is the largest investment in higher education since the GI Bill. Critics say the act will increase the cost of loans at the expense of students and parents. The Daily Lobo asked Reed Dasenbrock, New Mexico secretary of higher education and former UNM provost, what the act might mean for UNM students if it is approved by the Senate and president.
UPDATE: The Senate approved similar legislation on Friday, and now the the House and Senate bills need to be reconciled before going to the President.
Daily Lobo: What do you think of HR 2669?
Reed Dasenbrock: There are two very different opinions. The Republicans feel it's increasing the role of the federal government. The Democrats believe there are profits that can be squeezed out of the student loan system. It would take $18 billion out of lender subsidies and put back into federal financial aid. I support the bill. I think it is likely to increase the amount of Pell Grant money to students in New Mexico. It's real important to increase the Pell Grant availability. It would be a lot more financial aid for students in New Mexico. It's a controversial bill. President Bush has threatened to veto it. There is certainly strong opposition.
DL: Why are the Republicans against it?
RD: It's different ideologies. They're asking, "Do you feel strongly that the federal government has a role in providing funding for higher education?" or "Do you feel strongly that the federal government should be limited?" Republicans generally favor limiting the federal government's role. In New Mexico, there is far more agreement. The politicians in New Mexico agree that what things need to do be done in a poor state like this are to make higher education more affordable. At the national level and state level, I think we all have a strong social interest in making college more affordable. Nationally, it's become a partisan issue because President Bush threatened to veto it. I wouldn't want to say that all Republicans right now in Washington are against it, but this has become a partisan issue.
DL: Why are the lending companies against it?
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RD: They think it's going to increase costs because it will take money from their subsidies, and they'll pass those costs on to the students. Democrats are saying there's excessive costs that can be squeezed out of the student loan system. It's of interest to students at UNM that Pell Grants will go up. It'd be huge for the students in New Mexico.
DL: Will the act make it more expensive for students with existing loans?
RD: Those claims are being made. I'm not an economist. I can't speculate on how it will affect the economy. The people making those claims are afraid of losing money. So, those are interested parties. Social interest in this country is to get students in college. In New Mexico, even if it costs a little more money for existing loans, I think increasing the Pell Grant would be a huge plus.
DL: Why is it more important to increase the Pell Grant than to have cheaper loans?
RD: We have got to make college more accessible in this country. Young South Koreans are 25 percent more likely to be in higher education than American kids. That's scary. Pell Grants make it possible for people to go to college. I want badly for more students to go to college, and that means increasing the Pell Grant. We are also concerned about the average student debt load, and we do agree that we need to lower the average debt.
~ Jeremy Hunt
