In an attempt to curb spending and save money at the federal level, Congress may decrease the amount of money available for student loan programs.
Congress is undergoing a budget reconciliation this year to make cuts and redistribute funds among its many programs. Last week, the U.S. Senate approved a bill that could cut student loans by $17 billion, according to Inside Higher Ed, an online news source following developments in higher education.
The Senate bill would partially offset the losses to student loan programs by giving money for new student grants and lower origination fees for loans from three percent to two percent.
The parallel bill in the House of Representatives would cut more than $14 billion from student loan programs, according to Inside Higher Ed.
These bills would affect higher education over a five-year period.
The House bill, while lower in cuts, would not offset student losses as much as the Senate bill, said Pat Myers, director of government relations.
Neither the federal nor the state governments have been able to raise the amount of financial aid enough to keep up with rising costs, Myers said. The federal government tries to increase the amount for Pell Grants every year, but, it rarely happens because other, more pressing demands require those funds. For example, some savings from the proposed cuts of loan programs would assist victims of Hurricane Katrina.
“Both on the state and increasingly on the federal level, as the country went through a recession, higher education budgets had to be cut,” Myers said.
Consequently, higher education institutions have had to raise tuition rates to keep up with the cuts, she said.
“We can’t have the answer be that we begin to limit access (to higher education),” said David Creamer, vice president for Administration. “In the end, that’s not an acceptable outcome, and, at times, it appears that’s where we’re headed.”
Students are not the only group being hit by financial cuts. Creamer is a member of a statewide Out of the Box committee, which is looking at new ways to fund higher education. For years, the state has just tried to adapt the old system, changing only as necessary, Creamer said. However, as the funding situation continues to worsen, higher education might have to look for a more permanent solution in the form of a new system.
Currently, the committee is just opening up the floor for discussion and ideas, no matter how radical they may seem.
“Sometimes the best ideas come from the absurd,” Creamer said. “Sometimes, you have to force yourself to evaluate the way your dealing with a problem.”
This committee is just one of many looking at various aspects of higher education. Myers said there have been about three committee and council meetings per week dealing with these funding issues, including the Commission on Higher Education and the Economy, the Higher Education Funding Study Council and the Student Financial Aid Consultation committee.
“Everybody understands what students are going through, and everyone is doing their part,” Myers said.
“There are just so few funds available to do it. It takes private and business donations.”
At Kent State, one form of financial aid offered through the university is the Founders Scholar program, which gives money from private donors to students based on merit, Myers said. President Carol Cartwright began the program and has often donated money of her own.
There is currently nothing threatening state financial aid, Myers said.
Contact administration reporter Rachel Abbey at [email protected]