Vote slashes financial aid

Early Friday morning, the U.S. House of Representatives approved a bill by a razor-thin margin that includes the largest cuts to federal student loan programs in U.S. history.

The $50 billion budget reconciliation bill includes $14.3 billion in cuts to federal financial assistance to college students over five years, as well as billions in cuts to other federal programs, including Medicaid and food stamp programs.

The bill passed by just two votes, 217-215, in a decision divided almost completely down party lines. House Democrats voted unanimously against the bill. Only 14 Republicans voted against the bill, with the remainder of the Republican majority, including Central Minnesota's own Mark Kennedy, able to push the bill through the House.

"This package is by no means perfect," Kennedy said. "Where this bill works to slow our overall spending, Congress needs a tool to help do away with erroneous spending on ineffective programs."

The budget bill would reverse a previous law capping the interest rates for student loans at 6.8 percent, increasing the cap to 8.25 percent. It would also increase the cap on parent loans from 7.9 percent to 9 percent. For a graduating college student with the average debt load of $17,500, the changes would increase the cost of paying off loans by $5,800 in interest and fees.

The bill would also raise taxes on student loans, raise interest rates on consolidation loans and reduce subsidies paid to student lenders, totaling $20.5 billion in cuts over a 10-year period, according to estimates by the Congressional Budget Office.

Kennedy's decision to vote for the budget reconciliation bill was contingent on the provision for drilling in the Arctic National Wildlife Refuge (ANWR) being dropped from the bill. He said he worked diligently to ensure that Arctic drilling would not be a part of the budget package.

House leaders now face talks with the Senate, which passed a much less aggressive plan for students earlier this month. However, the Senate bill does support drilling in ANWR.

Without major spending cuts, tax increases or both, the national debt will grow by more than $3 trillion through 2010 to $11.2 trillion, nearly $38,000 for every man, woman and child. The interest alone would cost $561 billion in 2010.

"Reducing the deficit is a responsibility we owe to our children," Kennedy said. "That's why it was critical throughout this entire process to carefully evaluate all elements of the bill and ensure that the priorities in it reflect our Minnesota values."

Anne Mason, communications director for Mark Kennedy, said the Congressman waited until the last minute to decide whether or not to vote for the bill.

"He waited until all provisions were in order to make his decision," she said.

Mason said the budget reconciliation is not as bad as it sounds to some students.

"There were so many changes to the bill," she said. "The recent version only cuts profits of financial institutions, not students. The institutions were getting 10 percent from student loans. This bill just closes the loophole."

Although Kennedy voted for the reconciliation, Mason said the calling days, in which students at SCSU and campuses around the country called their legislators urging them to vote the bill down, did not go ignored.

"Anytime he hears from his constituents, young or old, he takes it into consideration," she said.