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Senate Democrats Unveil Bill to Increase College Aid

Senate Democrats Unveil Bill to Increase College Aid
Proposals include more funds for diversity programs, tax credits for low-income families  Senate Democrats proposed a new higher education bill last month that would increase college aid, encourage universities to hold down costs and allow students to refinance higher interest college loans.
The additional help would come, in part, at the cost of lending institutions, as students would be able to save thousands of dollars in lower loan payments. As college costs continue to rise and states struggling with deficits tighten their belts, lawmakers have begun to roll out plans for the renewal of the Higher Education Act, which expires next year. Senior Democrats on the Senate education committee targeted lower college costs and greater loans as their priorities.
“Let us come together again on a bipartisan basis to first and foremost help all students have access to college and help all families afford a quality postsecondary education,” said Sen. Edward M. Kennedy, D-Mass. “Students should not have to mortgage their futures to finance a college degree.”
College costs at four-year public institutions went up more than 13 percent last year and 10 percent the year before, Democrats said.
The bill is being proposed by Kennedy, Sen. Christopher Dodd, D-Conn., Sen. Jack Reed, D-R.I., and other members of the Senate Health, Education, Labor and Pensions Committee. The Bush administration has yet to unveil its education bill.
“Saddling our students with unmanageable levels of debt and forcing students to get jobs where long hours affect their grades is not a recipe for ensuring the future success of students and our economy,” Reed says.
The Democrats say their bill does not call for price controls, such as those proposed recently by Rep. Howard McKeon, R-Calif. McKeon introduced legislation that would withhold federal money from colleges that raised tuition more than twice the rate of inflation.
“Parents and students are being hurt by exploding college costs, and the Senate Democrat proposal would only intensify their pain,” says Rep. John Boehner, R-Ohio, chairman of the House Education and the Workforce Committee. “Regrettably, there is nothing at all in the Senate Democrat proposal that would discourage taxpayer-funded colleges and universities from engaging in hyperinflationary tuition hikes that hurt parents and students.”
The Kennedy bill instead uses incentives to encourage colleges to rein in tuition hikes and would punish states that cut back school aid.
Kennedy said the bill would provide more federal money to states willing to invest in higher education, but states that cut education funding would be limited to their current levels of aid.
The proposed bill calls for:
• A maximum increase of almost $500 in the annual Pell Grants;
• $3,000 in annual tax credits for low-income families who have previously not qualified;
• An increase in annual campus-based financial aid, such as work-study programs;
• Greater disclosure of tuition costs and financial-aid grants by colleges; and
• Increased funding for diversity programs and for minority-serving institutions. House Republicans dispute study’s findings
According to a recent College Board study, tuition and fees at four-year public colleges and two-year public institutions rose by 14 percent, and rose 6 percent at four-year private colleges, primarily due to shrinking state appropriations and the need to remain competitive.
However, House Republicans dispute the College Board’s contention that the tuition and fee increases were primarily due to falling state aid appropriations.
“Hyperinflation in college costs has been pummeling parents and students for more than a decade, and the problem has not been a lack of spending by states or the federal government,” Boehner says. “Even when states were increasing their investment in higher education in recent years, college tuition was skyrocketing.”
Tuition and fees at four-year private colleges averaged $19,710, or $1,114 more than last year, while tuition and fees at four-year public colleges averaged $4,694, or $579 more than last year. At two-year public institutions, tuition and fees averaged $1,905, or $231 more than last year. Between 1992 and 2002, there was a net drop in community college cost of tuition and fees when considering state, federal and institutional aid.
Over the 10-year period ending in 2003-2004, average tuition and fees rose 47 percent ($1,506) at four-year public colleges and universities and 42 percent ($5,866) at private colleges. This growth rate was lower than that of the previous decade, when the real rates of increase were 54 percent and 50 percent respectively.
“There is cost and value to continually increasing the opportunities for more students to be connected to college success,” says Gaston Caperton, president of the College Board and former governor of West Virginia. “We all must be responsible to take actions to ensure that every child who has the drive and the desire to prepare for college has the chance to pursue that dream and not to be denied that opportunity because of the cost.”
While tuition and fees rose last year, so did forms of aid to students, Caperton pointed out. A record of $105 million was distributed in student financial aid, an increase of 15 percent over the previous year or 12 percent after adjustment for inflation. Grant aid grew by 10 percent in 2002-2003, while education loan volume rose by 14 percent. Grant aid per full-time student grew by $300 compared to an increase of $551 in loans per full-time student.
Last year, Pell funding grew by 15 percent in inflation-adjusted dollars, but the average Pell Grant increased only by 3 percent, providing an additional $123 per student. Today the maximum Pell Grant covers 41 percent of the average charges including tuition and fees and room and board at a public four-year college.
Almost half of grant aid received by students is funded by institutions. The $20 billion in institutional grants distributed last year was 11 percent higher than the previous year. Institutional grant aid grew 122 percent over the last decade in inflation-adjusted dollars. Students enrolled in two-year public colleges received an average of almost $2,000 in grant aid and average grants for public four-year college students totaled about $2,400. At four-year private institutions, grant aid averaged $7,300 per student.
Other college financial-aid experts said it’s important that the system focus on how to make college more affordable for lower-income and underrepresented students.
“It’s absolutely true that we have a significant access problem and that a large number of low-income students that are prepared for college do not enroll. There is a deeply disturbing gap between the enrollment rates of upper-, middle-income students and low-income students,” said Sandy Baum, an economics professor at Skidmore College and co-author of the college pricing and aid reports.

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