THERE ARE FEW SURER WAYS to increase the gap between rich and poor than by making higher education more expensive. Yet Congress is poised to do just that. Current budget plans would deal federal student loan programs their most painful setback since their inception, limiting the opportunities for those at the lower end of the economic spectrum to build a better life.
The House last month voted to slash funding for federal student loan programs by $14.3 billion, reversing decades of expansion that have helped open the country's most expensive universities to poor and middle-class students. The House's cuts would add about $5,800 to the average $17,500 student loan debt, according to the Congressional Budget Office.
For The Record
Los Angeles Times Sunday December 11, 2005 Home Edition Current Part M Page 4 Editorial Pages Desk 1 inches; 40 words Type of Material: Correction
Education: An editorial Thursday on federal student loans said the Congressional Budget Office estimated that proposed cuts would add $5,800 to the average loan debt. The figure should have been attributed to the Public Interest Research Group's Higher Education Project.
The cuts couldn't come at a worse time. According to the nonprofit College Board, average tuition and fees at public universities have surged 40% over the last five years. The median family income has crept up just 16% over that period. And early this year, the U.S. Department of Education tweaked its eligibility formula for Pell Grants, an assistance program for low-income students. That eliminated aid to more than 80,000 students and reduced awards to about 1.5 million others.
To compensate, many students have increasingly turned to generous federal student loans to pay for their education. About two-thirds of college students graduate with some debt.
Part of a larger package to rein in federal spending by $55 billion, the House's plan would tack higher fees and interest rates onto student loans. It would also restrict students' ability to refinance their loans to take advantage of lower interest rates.
The Senate's plan is also painful but more sensible than the House's -- it would cut about $9 billion from federal student loan programs but would also restore some funding to Pell Grants. Congress returns from its recess next week, and the House and Senate will have to work out a compromise to send to the president's desk.
With the soaring costs of the Iraq war and cleaning up after Hurricane Katrina, some cuts to student loan programs may be unavoidable. If so, the Senate's plan, which targets fees paid to private lenders, is the lesser evil. If the House has its way, this Congress could be remembered as the one that priced middle-class families out of college.