The U.S. House of Representatives will consider a bill this week that would include $14.3 billion in cuts to federal student aid programs throughout the nation over the next five years.
If passed, the "Raid on Student Aid" — as many Democrats are referring to it — provision of the Higher Education Act, which is being reauthorized through the House Budget Reconciliation bill, would create $8 billion in extra student financial aid charges.
"The 'Raid on Student Aid' is picking the pockets of students even more than we initially thought," U.S. Rep. Ron Kind, D-Wis., who is a member of the House Budget Committee, said in a release.
The federal government would achieve the multi-billion dollar aid cut through tacking on $5.46 billion in additional charges to student borrowers upon consolidation of student loans; new taxes on student loans totaling $1.82 billion; and $505 million in charges that would occur due to the repeal of a cap on the maximum interest rate for student loans.
"This bill will force the average student borrower, already saddled with $17,500 of debt, to pay as much as $5,800 in interest and taxes over the life of his or her loan," Kind said in the press release. In Wisconsin alone, 138,000 college students would be affected by the cuts.
Additionally, the reauthorization of the Higher Education Act would also put a freeze on funding for the Federal Work Study program and the Leveraging Educational Assistance Partnership Program, creating an estimated combined loss of $175 million in student aid.
While the reasoning for general cuts in the federal budget, which also include curbed healthcare funding, is to pay for the aftermath of Hurricane Katrina, State Rep. Spencer Black, D-Madison, said the wealthy benefit from the cuts through tax benefits.
However, House Republicans defended the action, saying the change in student aid is a fiscally responsible move that will remove government waste. U.S. Rep. John Boehner, R-Ohio, said in a release the measure will place loan programs on a "more solid financial foundation."
"After more than a decade of tuition increases that have far outpaced the rate of inflation and growth in family incomes, it has become clear that blindly increasing federal student aid is doing nothing to solve the challenge of skyrocketing college costs," U.S. Rep. Howard P. McKeon, R-Calif., chairman of the Subcommittee on 21st Century Competitiveness, said in a release.
Though McKeon said the decision would save taxpayers money, Black said the consequences far outweigh the benefits.
"With tuition having increased over 50 percent … students are finding it harder and harder to afford an education," Black said of post-secondary education in Wisconsin. "Without increased federal financial aid, it's going to make it even harder for them."
Student financial aid comes from state money as well, Black said, but such funds do not hold pace with rising tuition costs, either.
Sara Goldrick-Rab, an assistant professor of educational policy studies and WISCAPE faculty affiliate, said students across the nation are more likely to take out student loans, and referred to the aid cuts as a "disinvestment" in higher education.
"Tight financial times" and the increased cost of loans will carry through long after students have graduated from college and will place an "undue burden" on students, Goldrick-Rab added.
Kind said fully funding student financial aid in the nation would directly correlate with the future of the U.S. and the health of its economy.
"Instead of making drastic cuts to higher education, we should be investing more in the skills of a new generation of students so they succeed in today's global marketplace and make America's economy stronger," Kind said.
