The Wall Street Journal reports that the total amount borrowed by students in the 2008-09 academic year grew 25% to $75.1 billion. Though a rise in loans was anticipated, these numbers exemplify the impact that the shaky economy has had in speeding up the reliance on loans as a means to fund higher education.
Yet this week, the U.S. House of Representatives will vote on a historic piece of legislation that helps ease the impact of the recession on students, families and workers by investing $40 billion in additional grant aid, increasing investments in community colleges, and making loans more affordable. The Student Aid and Fiscal Responsibility Act (or SAFRA)  represents an extraordinary reinvestment in higher education that will assist students across the nation in achieving affordable access to college.
The legislation is being offered at a pivotal time, as the number of students graduating with $25,000 worth of student loan debt has tripled in the past decade. Large numbers of lower or middle-income young adults are finding it difficult to enroll and remain in college. At the same time, economic instability has caused state revenues to shrink, which in turn have led to dramatic cuts in public college budgets. As a result, many public colleges and universities have had no other choice but to institute large tuition increases to make up for the lack of funding.
SAFRA seeks to provide relief to millions of students, parents and workers struggling to obtain a college degree and or a decent job.
The Act will increase the annual Pell Grant maximum to $5,500 in 2010 and $6,900 in 2019 by investing $40 billion in the program. As a result, several hundred thousand more students will qualify for aid and with that, the opportunities that a degree will afford them.
The Perkins Loan program, which provides young adults with low-cost loans, will also be strengthened under SAFRA. This will allow students who need additional help to work with their schools in order to receive low cost loans from the federal government rather than relying on risky private loans.
The legislation also makes important investments in community colleges and worker retraining. At the current rate, the U.S. will fail to meet its workforce needs, projecting a shortfall of 16 million college graduates by 2025. SAFRA will revitalize community colleges by updating facilities and creating free and accessible online curriculum, as well as building partnerships between schools and businesses.
As a result of SAFRA, all federal student loans will be given through the Direct Loan program, which more efficiently utilizes the government’s education dollars. This reform in student lending eliminates borrowers’ dependence on market conditions, while also saving $87 billion to invest back in education support and reducing the deficit.
SAFRA also keeps interest rates low for lower income students and their families who qualify for subsidized Stafford loans by applying a variable rate beginning in 2012, rather than increasing them from 3.4 percent to 6.8 percent.
The Act simplifies the Free Application for Federal Student Aid (FAFSA) form by cutting down the number of questions on the form, so that students and families can apply for aid without increased problems.
Finally, SAFRA invests $1.2 billion in Historically Black and Minority-Serving Institutions to provide support to ensure college access and completion to these communities.
President Obama has made education a centerpiece of his plan; now Congress has a unique opportunity to do so as well.
It’s not too late to contact your Representative and urge them to support H.R. 3221—The Student Aid and Fiscal Responsibility Act!
Robert Brandon is the coordinator of The Campaign for College Affordability.