Defying a veto threat from President Bush, the House of
Representatives on Wednesday approved a bill to cut subsidies to student loan
providers and use the proceeds to reduce interest rates and provide more money
for Pell Grants and minority-serving colleges.
By a 273 to 149 vote, the House
approved the College Cost Reduction Act, which would slash lender subsidies by
$19 billion and redirect most of the savings to other higher education
priorities. “This bill is a remarkable step forward in our efforts to help
every qualified student go to college,” said Rep. George Miller, D-Calif.,
chairman of the Education and Labor Committee.
A similar bill has cleared a Senate
committee and should come up for a floor vote later this month, said Sen.
Edward Kennedy, D-Mass. He called the House vote a victory for students and
families. “The time to put the needs of students ahead of the profits of banks
is long overdue,” he said.
Historically Black colleges and
Hispanic-serving institutions would gain significantly through new funding
guarantees over the next five years, said Rep. Ruben Hinojosa, D-Tex., who
chairs the House subcommittee on higher education.
“It is clear that minority-serving
institutions will only grow in importance,” Hinojosa said. “This historic
initiative will ensure that our nation has enough qualified graduates to fuel
its knowledge-based economy.”
For Pell Grants, the bill would
increase the maximum grant to $5,200 during the next five years. Student loan
interest rates would drop from 6.8 percent to 3.4 percent, which can make
college more affordable for low-income students.
