College Affordability Now

Last week, supporters of student loan reform were able to breathe a sigh of relief as a dangerous amendment to the Senate Wall Street Reform bill was defeated.  The amendment, proposed by Senator Richard Shelby (R-AL), would’ve severely restricted the ability of the Consumer Financial Protection Bureau (created by the bill) to protect student loan borrowers.

As it stands, the administration of private student loans remain largely unregulated.  Financial regulation doesn’t apply to private student lenders because they are not operating within the government system.  As such, there is little to no protection for students or parents of students that take out private loans.  Federally backed loans or direct loans have more protections and are also helped by reductions in debt repayment for public service or lower income borrowers.  Private student loans are one of the only types of debt that cannot be discharged in bankruptcy.  What’s more is that there are virtually no limits on the interest rates private companies can charge, and with these companies encouraging students to take out bigger and bigger loans, students today are faced with essentially insurmountable debts after graduating. 

The proposed Consumer Financial Protection Bureau aims to combat this issue.  Under Senator Chris Dodd’s (D-CT) Wall Street Reform bill, the bureau would be given the authority to independently regulate private loan companies to the aim of protecting consumers.  This would include giving the bureau the ability to potentially cap interest rates, and extend protections for federal loan borrowers to borrowers of private loans.  The amendment proposed by Senator Shelby would have essentially stripped the bureau of all funding, authority, and oversight, rendering it powerless against the country’s loan powerhouses or fly by night lenders and providing no protection to student borrowers. 

Now that the Shelby amendment has been defeated, the bill moves on to be further debated by the Senate.  For updates on the bill, other amendments, and the debate continue to check our blog, or follow us on Twitter @CampaignforCA.

FOR IMMEDIATE RELEASE:
March 19, 2010

Contact: Robert Brandon, Campaign Coordinator
202-331-1550 | rmbrand@robertbrandon.com

Budget Reconciliation Package to Invest in Students, Workers, Families
Coalition Commends Inclusion of College Access and Affordability Measures in H.R. 4872

Robert Brandon, Coordinator of the Campaign for College Affordability, released the following statement in response to the unveiling of H.R. 4872, The Health Care & Education Affordability Reconciliation Act of 2010:

“I applaud Speaker Nancy Pelosi and Chairman George Miller of the Education and Labor Committee, who recently announced the inclusion of college affordability measures into the 2010 reconciliation budget bill. By integrating the health reform and student aid bills, the House leadership has displayed an unending commitment to students, workers, and their families.

“This legislation comes at a critical time for our country.  America is falling behind in completion rates, while allowing debt to put financial strain on college students and graduates. Meanwhile, there is a huge gap in the middle-skill level work force, and predictions show that we will fail to meet our labor needs by 2025 with a shortage of 16 million college graduates. Low skill workers need training, and laid-off workers need new skills in order to meet the evolving requirements for success in today’s competitive global economy.

“H.R. 4872 will take the savings from the direct student lending reform and make landmark investments in higher education. The money from eliminating the wasteful subsidies of the FFEL program—approximately $67 billion dollars—will be used to fund an increase in the maximum Pell grant to nearly $6,000 by putting $36 billion into a program that ensures young people the opportunity to attend college.

“The savings will also be used to make investments in Minority-Serving Institutions such as HBCU’s, Hispanic-Serving Institutions, and Tribal Colleges, to aid lower income students in receiving a quality higher education. The bill strengthens the Income-Based Loan Repayment system and allots funding for the Community Access Challenge Grant program. Investments in community colleges amounting to $2 billion will also help ensure fair access and worker retraining through partnerships and new programs.

“Our coalition of student groups, teachers, and workers unites to commend the announcement of this bill, and to urge its swift passage. To vote in its favor would be a historic stride for millions of Americans, helping to make college accessible and affordable to all and to decrease the burdens of education’s high cost and associated debt.”

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The Institute for America's Future and the National Skills Coalition recently released a report entitled, “Worker Training: A Bridge to the New Economy.”

Bob Brandon, who coordinates the Campaign for College Affordability, released this statement in response to the report:

"Young people need training, low-skilled workers need new skills and many laid-off workers need retraining in order to get good jobs and to compete in the global economy.  The Administration included a $4 billion boost in Labor Department training programs under the American Recovery and Reinvestment Act and the President has proposed a $12 billion investment in community colleges to modernize skills training.  Congress should embrace the investment in community colleges contained in the House-passed Student Aid and Fiscal Responsibility Act, vote to extend the temporary training programs from the fiscal stimulus package and reauthorize and strengthen the Workforce Investment Act."

Visit this page for state-by-state reports.

This week, 50 organizations representing millions of students, families, workers and educators, wrote to urge the Senate to support President Obama’s higher education agenda. The groups expressed their support for initiatives embodied in the Student Aid and Fiscal Responsibility Act (H.R. 3221), which recently passed in the U.S. House of Representatives. The Senate HELP Committee--chaired by Sen. Tom Harkin (D-IA)--will be marking up their version of the bill in the coming weeks. The coalition was spearheaded by the Campaign for College Affordability, Campus Progress, United States Student Association and United States Public Interest Research Group. The cooperation of these organizations, which include major unions, student groups, women’s groups, parents groups, African Americans, Latinos, college admissions officers and registrars, social workers and others, sends the clear message that this legislation is critical for the advancement of educational opportunity in America, and will finally prioritize the needs of students over those of banks and special interests.

You can read the letter here.

Robert M. Brandon, coordinator, released this statement in response to the passing of H.R. 3221:

“The Campaign for College Affordability commends the U.S. House of Representatives for its passing of the landmark Student Aid and Fiscal Responsibility Act (H.R. 3221). The bill’s passage ensures unparalleled relief for young people and families burdened by the costs of college tuition and by student loan debt. The Act provides support that will lead to increased student success and higher graduation rates.

“H.R. 3221 invests in ground-breaking new programs that support community colleges as a place for gaining skills to fill 21st Century jobs, and worker retraining for those impacted by the dramatic changes in our economy.

“By eliminating wasteful subsidies in the student loan program, Congress is freeing up scarce federal dollars and directing them where they’ll be most effective: promoting innovation and educating the skilled workforce necessary to compete in the global economy.”