Bush signs loan program cutting bill

WASHINGTON (AP)?” President Bush signed a measure Wednesday that includes over $12 billion in cuts to federal student loan programs.

The bill he signed is a leftover measure from his 2005 agenda.

The bill passed through both chambers of Congress by narrow margins. Vice President Dick Cheney had to break a tie in the Senate, causing the measure to pass 51-50 in December, but a slight change in the bill required it to be sent back to the House for a rare revote Feb. 1. The House passed the bill by two votes, 216-214, while Both votes were divided down party lines. No Democrats in the House voted in favor of the bill.

The measure aims to trim $39 billion out of the budget over five years, partly through cuts to Medicaid, Medicare and student loan subsidies.

Bush said programs such as Medicare, Medicaid and Social Security are the biggest long-term challenge to the budget. Even after the cuts he signed into law, the growth rates projected for the programs are unsustainable, he said.

The bill redirects nearly $13 billion over five years in subsidies to federal student loan programs, raises the interest rate for parent loans from 7.9 percent to 8.5 percent and fixes the interest rate for Stafford loans at 6.8 percent. The bill also cuts $2.2 billion from funds used to administer federal student loan programs.

The measure will likely raise the cost of attending college for millions of student borrowers throughout the United States who graduate with an average of $17,000 in debt, including over 90,000 residing in Oregon.

Some higher education spending is included in the bill as well, including $3.7 billion in grants for students majoring in math, science and foreign languages.

Bush’s approval of the measure was a final chapter in what turned into a marathon campaign for student advocacy groups, who spent countless hours lobbying both the House and the Senate as debate on the bill dragged on into the new year.

National organizations like the United States Student Association and the State Public Interest Research Group’s Higher Education Project campaigned heavily against the bill along with state student lobbies and student governments, nicknaming the bill the “Raid on Student Aid.”

Democrats said the measure was an assault on college students and the elderly and disabled who rely on Medicaid to pay for their health care. They said the bill, which was written in private, was evidence of the undue influence of corporate interests such as insurance companies and drug manufacturers.

Sen. Edward Kennedy, D-Mass., said in a statement that Bush was trying to put “a high gloss on his harsh budget.” He said if Congress approved the plan, it would make life harder for widows, orphans, the disabled and families trying to make ends meet, while making the rich more wealthy.

“Budgets are moral documents and this one is clearly unfair,” Kennedy said.

In an odd twist that required Senate action Wednesday night, the bill Bush signed was technically different than the measure that passed the House because of errors committed by the legislative clerks who officially enroll the bills. But Senate Democratic and Republican aides said the chamber would act to pass a technical fix that would solve the problem.

?”Additional reporting by Matt Petrie/Portland State Vanguard