Senator Edward Kennedy (D-MA), chairman of the Senate education committee, introduced an amendment to the Senate Budget Resolution that would allow the chairman of the Senate Budget Committee to increase reserve funds to increase federal student loan limits.
Kennedy's amendment would add "increasing federal loan limits" to the list of items the Senate Budget Committee chairman could make to the higher education reserve fund to "make higher education more accessible or more affordable" (Sec. 302). Currently the Budget Committee Chairman can revise the higher education reserve fund to increase funding for the Pell Grant, facilitate modernization of school facilities, or decrease the cost of teachers' out-of-pocket expenses for school supplies. Kennedy's deficit-neutral amendment would ensure that the budget resolution allows for an increase of loan limits should it be needed in the face of the credit crunch.
"Americans are anxious about how the slumping economy affects their families," said Kennedy in a press statement released yesterday. "Financial aid officers in some colleges are telling them that loans may not be available when the school year starts this fall."
Kennedy outlined three steps that should be taken to help students through the credit crunch: increase funding for the Pell Grant, ensure continued access to federal student loans through the Direct Loan program and the lender-of-last resort provision, and strengthen the federal student loan program by allowing increases in loan limits.
"We're here today to say that we cannot allow the credit crunch to prevent our young people from going to college," continued Kennedy. "The ability of young Americans to pay the high cost of college should not be determined by the quarterly earnings of banks."
Kennedy highlighted increases in federal loan limits in 2005, but called those increases inadequate for today's students. "[A]s more and more students are forced to turn to private loans, it's clear that the limits no longer reflect the reality of what it takes to pay for college today."
The Senate Committee on Health, Education, Labor, and Pensions will be holding a hearing at Northeastern University in Boston Monday about "Ensuring Access to College in a Turbulent Economy."
Congress is currently debating the Budget Resolution and NASFAA will continue to update members as events unfold.
Other Media Coverage
By Justin Draeger
NASFAA Assistant Director for Communications
Posted 03/13/08 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web Site questions or comments to Web@NASFAA.org.
