July 15, 2009

How Will New College Access Bill Control Costs?

Posted by Adam Waxman at 2:41PM

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Congressman George Miller (D-CA)

Congressman George Miller (D-CA) has long been a progressive champion on healthcare, labor rights, and economic justice. I was excited to see that he has introduced a new bill that would reform the student loan system in an effort to make college more accessible and allow more young people to get their college degree. As I have written about before on this blog, personal debt of all types is one of the most pressing issues that our generation faces. Congressman Miller’s new bill, the Student Aid and Fiscal Responsibility Act of 2009, tackles a couple of important issues in regards to student loans.

First, the bill would increase the maximum Pell Grant scholarship to $6,900 by 2019, and link the grant to cost of living increases starting in 2010. To me, the introduction of cost of living increases is incredibly important, given how fast college costs are rising. The new bill would also streamline the Federal Application for Student Aid (FAFSA) process, something that would benefit adult students and others who are hard-pressed to navigate government paperwork.

The bill also codifies important reforms that streamline how American students borrow money. Currently, U.S. policy wastes billions of dollars on subsidies to private loan companies that are federally insured. Miller’s bill would save that money by making the federal government the provider of loans directly. Money saved from the direct loans program would go into a variety of college-access initiatives and paying down the deficit.

Affordability advocates have hailed the bill. For example, in a statement, Campus Progress declared that the bill “will eliminate wasteful subsidies to student loan companies and use the $87 billion in savings on a bold policy package to make college more affordable and accessible for low and middle income families.” Campus Progress has launched a new campaign, called “Students over Banks,” to build support for the reforms.

I think the new proposals are great; but I wonder why there is so little focus on controlling costs. College tuition has increased 439 percent from 1982 to 2007, according to a study put out last year. Think about that next time you get a call from your college alumni office asking for your support in building a new stadium. There has been a lot of debate about whether or not college costs can be controlled. It seems to me, with all the money that the federal government is pouring into high education, a means could be found to reduce costs on the front end. We demand the same from other companies and nonprofits that get taxpayer money, why not schools?