The U.S. House of Representatives passed legislation early Friday morning cutting $14.3 billion in federal student financial aid and $11.4 billion in Medicaid funds.
The cuts were part of the "Deficit Reduction Act" — a Republican budget plan aimed at denting the national debt through a five-year, $50 billion cutback in mandatory spending — and passed by a narrow 217-215 House vote.
U.S. Rep. Ron Kind, D-Wis., who voted against the act, said the "Raid on Student Aid," the largest cut to student assistance in U.S. history, will place undue financial stress on students.
"Increasing the burden on student borrowers at a time when more and more people are opting not to go to college because of the high cost of higher education is bad policy that fails to ensure the growth of our economy or help us stay competitive in the global marketplace," Kind said in a release.
According to United States Student Association Legislative Director Jasmine Harris, the slash in funding would create $5,800 in additional debt through interest and taxes for the average student borrower.
A portion of the cuts would be met by 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.
However, Republicans defended the measures, calling the cuts a necessary means to squelch rampant government spending.
"Passage of the 'Deficit Reduction Act' is an important first step to reining in out-of-control federal spending that poses a threat to every student, family and worker in America," U.S. Rep. John Boehner, R-Ohio, said in a release. "This bill demonstrates our resolve to restore fiscal responsibility and reduce the federal deficit on behalf of our children and grandchildren."
Boehner said the reduction in federal student aid will strengthen student-loan programs in future years by making them operate at a more efficient level.
"The bill provides the best possible policy given the budget constraints facing the nation," Boehner said, adding the approval of a $6.2 billion windfall in funding to a federal pension insurance program included in the act was an essential compromise to reinforce the pension-plan system.
But Brian Shactman, chair of College Democrats of Madison, said the bill is indicative of misplaced priorities on the part of Republicans.
"All four of Wisconsin's Republican delegation in the House voted for the Deficit Reduction Act," Shactman said. "And this just goes to show Republicans care more about giving tax breaks for the wealthy than helping students afford a college education."
The cuts will make it more difficult for lower- and middle-income students to achieve a college education and could lead to more students dropping out of college due to financial constraints, Shactman said.
U.S. Rep. Paul Ryan, R-Wis., a supporter of the Deficit Reduction Act, said curtailing federal expenditures is especially necessary due to "unforeseen spending that has been necessary for hurricane recovery."
"We should find savings to pay for this spending, not raise taxes on Wisconsin families and small businesses," Ryan said in a release. "With the federal government expected to spend nearly $14 trillion in taxpayer dollars over the next five years, $50 billion in savings through sensible reform is the least we can provide."
