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It's all about the bankers-- again. As I've said in this blog numerous times, the Student Aid and Fiscal Responsibility Act is poised to dispense critical aid to low-income college students and the colleges they attend-- if the lending industry doesn't kill it first. The savings that would result from a move to direct lending are substantial. Money would go directly to the neediest college students and to community colleges, a sector that is swamped and struggling in this recession. This investment in human capital is in so many ways a no-brainer-- it'll generate a large return, benefit folks in nearly every community in the country, and support the American dream. Of course, the bankers will have none of it. In the current system they draw profits on the backs of students, lending them money and selling those loans to the government. They are so eager to hold onto those profits that they argue that the status quo is actually good for students. Disgusting, but not...

The end of last year was a busy time for me as I waited out the birth of my daughter who decided to spend an extra 10 days lounging in utero before emerging into the Wisconsin winter. I was so focused on strategies to promote her exit (sidenote: talk about an area in need of better research-give gobs of data on live births for hundreds of years, docs still refuse to hazard a prediction of labor occurring on any given night!), I virtually shut out the world of higher education policy. Imagine! Thankfully, others were hard at work around and over the holidays, thinking about ways to make sure that the substantial, timely, and hard-won investment which will (fingers crossed) soon come to higher education via the Student Aid and Fiscal Responsibility Act (SAFRA) are most effective. Evidence of that work is contained in a December Lumina Foundation memorandum to the U.S. Department of Education, awkwardly (but accurately) titled "Structuring the Distribution of New Federal Higher Educ...

Since 1958, the Federal Perkins Student Loan Program has been providing low-interest loans to needy students via campus-based revolving funds. More than 600,000 students (mostly undergraduates with family incomes under $30,000) receive a Perkins each year. The current Perkins differs from other federal loan programs, most notably the Stafford, because it is subsidized (the interest doesn't begin accruing until 9 months after graduation) and has a lower interest rate (5%, compared to the 6.8% Stafford). The Student Aid and Fiscal Responsibility Act (SAFRA) would change the Perkins in some notable ways, not all of which are clear improvements. The proposed changes are rather intricate, and as I've spent a fair bit of time puzzling over them lately I want to bring some of my nagging questions to this wider audience in an effort to gain some insights and answers. (In full disclosure, the financial aid officer at my university, Susan Fischer, is a vocal opponent of the changes. ...

Today the U.S. House of Representatives voted 253 to 171 to pass the Student Aid and Fiscal Responsibility Act. It knocks private lenders out of the student loan business, and uses the savings to make transformational investments in the nation's community colleges, as well as increase the Pell grant. Some, including La Guardia Community College president Gail Mellow, have called this the most important piece of higher education legislation since the G.I. Bill. Let's hope the Senate soon follows on the House's class act! (at least the House had at least 1 class act this week...)