House OKs $14 billion in student aid cuts

The U.S. House of Representatives approved by a razor-thin margin a bill that includes the largest cuts to federal student loan programs in U.S. history early Friday morning.

The $50 billion budget reconciliation bill includes $14.3 billion in cuts to federal financial assistance to college students over five years, as well as billions in cuts to other federal programs, including Medicaid and food stamp programs.

The bill passed by just two votes, 217-215, in a vote divided starkly down party lines that began at 1:20 a.m. EST and lasted 25 minutes. House Democrats voted unanimously against the bill. Opponents of the bill had hoped enough moderate Republicans would vote against the bill to prevent it from passing. In the end, 14 Republicans voted against the bill, but the remainder of the Republican majority in the House was able to push the bill through.

The budget bill would reverse a previous law capping the interest rates for student loans at 6.8 percent, increasing the cap to 8.25 percent. It would also increase the cap on parent loans from 7.9 percent to 9 percent. For a graduating college student with the average debt load of $17,500, the changes would increase the cost of paying off loans by $5,800 in interest and fees.

The bill would also raise taxes on student loans, raise interest rates on consolidation loans and reduce subsidies paid to student lenders, totaling $20.5 billion in cuts over a 10-year period, according to estimates by the Congressional Budget Office.

House leaders now face talks with the Senate, which passed a much less aggressive plan earlier this month.

Speaking on the House floor Thursday night, Rep. George Miller, a Democrat from California, told Congressional Republicans it was an “absolute tragedy that you would do this to young people.”

“These students here are punished because of your inability to keep your promises,” Miller said.

Rep. Chet Edwards, a Democrat from Texas, called the cuts to student loan programs “mean spirited” and an “assault on the dreams of middle- and low-income American families.”

Many House Democrats criticized Republicans for proposing cuts to student aid programs while also supporting plans for $70 billion in tax cuts, which primarily benefit the wealthy.

The budget reconciliation bill would “pay for additional tax cuts on the backs of students who are already struggling to pay for college,” said Rep. Dale Kildee, a Democrat from Michigan.

House Republicans, faced with trying to reduce a ballooning deficit from spending on the Iraq war and Hurricane Katrina, called the provisions in the bill necessary reforms to cut back spending that has grown out of control.

Rep. Tom Price, a Georgia Republican who sits on the House Education and Workforce Committee, called the bill “common sense proposals to reform and strengthen education.”

House Republicans had planned to bring the bill to the floor for a vote Thursday, but the failure of another budget bill prompted House Republican leaders to postpone a vote on the budget reconciliation bill for the second time in two weeks.

The fate of the budget reconciliation bill seemed uncertain earlier Thursday, when 22 Republicans broke ranks with their party and voted against a $602 billion spending bill for health, K-12 education and labor programs. The bill’s failure to pass was an embarassing defeat for Republicans, and GOP leaders quickly sent the House into recess, fearing that the bill containing the student aid cuts would meet the same fate.

Speaker of the House Dennis Hastert called the House back into session shortly after 8 p.m. EST, hoping that new concessions added to the budget reconciliation bill would get a passing vote. The outcome of the bill, however, still remained in doubt.

House Republican leaders postponed a vote on the bill once before, on Nov. 10 over concerns that the bill still lacked enough support to pass. The Republican defections on the spending bill Thursday further exacerbated GOP concerns that the budget reconciliation bill still may not have enough votes to pass.

In an effort to appease centrist Republicans, provisions allowing drilling in the Alaskan National Wildlife Refuge were dropped from the bill Nov. 9. The plan backfired, however, as supporters of the drilling provisions began expressing opposition to the bill, contributing to the delay on bringing the bill to a vote.

A rule attached to the budget bill allowed House Budget Committee Chairman Jim Nussle to change the language of the bill anytime before it went to the House floor without having to send it back to the Rules Committee. Because of the rule, House Republican leaders were able to alter provisions in the bill to try to garner more support.

Further concessions were made Thursday in an effort to ensure the bill’s passage, including changes to provisions dealing with food stamp programs and Medicaid. No concessions on the cuts to student aid programs were made.

National college student advocacy groups, such as the United States Student Association and the United States Public Interest Research Group (USPIRG) conducted campaigns urging students to organize against what the groups labeled the “raid on student aid.” Students across the country made over 10,000 phone calls and sent over 15,000 e-mails to members of Congress expressing opposition to the bill, according to the United States Student Association web site.

As Congress entered the late-night session Thursday, USPIRG organizers sent e-mails urging students to keep calling their representatives throughout the night.

Students from around the Northwest attending the Northwest Student Leadership Conference Nov. 12 also wrote hundreds of letters over the weekend to members of Congress urging them to vote against the budget bill. Portland State students were also involved in fighting the bill, organizing two “call-in days” to call members of Congress and urge them to vote against the bill.

A letter signed by 203 House members opposing the cuts to higher education was sent on Nov. 2 to Speaker of the House Dennis Hastert, Democratic leader Nancy Pelosi and the chairmen and ranking members of the Education and Workforce and Budget Committees.

The letter expressed concern that the cuts may create barriers that prevent first generation, minority and low-income students from completing college.

“These changes are not simply an additional burden for the Congress to place on students – but the cuts may cause some students to forgo their college degree,” the letter states. “American students need and deserve more affordable college opportunities, not additional barriers to achievement.”