A Student Loan Bill
Congress and the president are close enough to get it done.
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DESPITE WHAT you've been hearing, there is general accord on the basics of student loan policy. The Bush administration and reformers in both houses of Congress agree that wasteful subsidies for private student loan companies should be slashed. They want to redirect much of the saved money to student financial aid programs. Yet the debate on student loan legislation has become more than contentious.
Yesterday the House passed a version that decreases spending on subsidies by an estimated $19 billion over five years. Part of that money would go to halving the interest rate on federally backed loans, a pledge the House Democratic leadership made as part of its "Six for '06" midterm campaign platform. Another chunk would go to Pell Grants for low-income students. The bill also would establish a series of tuition assistance and loan forgiveness programs for certain student loan recipients, such as those who commit to teaching in high-need public schools after graduation or those working in public service.
On Tuesday, however, the White House threatened to veto the bill on the grounds that it spends money unwisely. Earlier this year, President Bush proposed directing savings from loan subsidies mostly to boosting Pell Grants. Cutting the interest rate, the Bush administration argued, helps students only after they have graduated, a point at which there are already favorable repayment options available. Rep. George Miller (D-Calif.), the education committee chairman who shepherded the bill through the House, insists that the rate cut would help middle-income families that are ineligible for Pell support but nevertheless are struggling to repay loans.
The White House has a point about Pell Grants -- they help the neediest of students when they need it most, during college. The Senate's version of the legislation, which puts more into the Pell Grant program, is preferable, though it also contains entitlements that may not be as helpful as other reforms. Regardless, all sides can and should broker a common-sense deal in the coming weeks -- assuming they are willing to compromise -- and avoid more talk of an unnecessary veto.
