The U.S. House of Representatives passed a preliminary federal budget reconciliation bill Friday morning that, if agreed upon by Congress, would cut $14.3 billion from student loan programs.
The Deficit Reduction Act, HR 4241, passed by a vote of 217 to 215, split the House almost exactly down party lines, with all Democrats voting against it and most Republicans voting in favor. The bill amends the Higher Education Act of 1965 and would increase interest rates and impose taxes on certain student loan programs.
The preliminary version of HR 4241 passed in the Senate on Nov. 3, and will move into a congressional conference committee this week for negotiation on its final provisions, said Bill Shiebler, United States Students Association (USSA) campus organizing director. Both houses will need to pass the final version of the bill by Jan. 1, 2006 for it to be put into effect.
The provisions of the bill apply to the Federal Family Education Loan program, as well as direct and consolidation loans for students. Interest rates on federal loans obtained on or after July 1, 2006 would potentially increase up to 8.25 percent. Such loans would also have 1 percent of the total amount deducted and taken back as a government fee.
Shiebler, a third-year sociology major, said USSA has worked to oppose the House and Senate bills for the past three months with their “Stop the Raid on Student Aid” campaign. In the past couple of weeks the group has organized call-ins to legislators and rallies on campus in order to oppose the legislation.
USSA will continue to encourage students to lobby against the bill while it is being discussed in conference committee, Shiebler said. He said the bill could be defeated with the support of two more representatives.
“I think we have a chance [to stop this],” Shiebler said. “Students and everyone need to push hard in the next couple weeks. We were only two votes away.”
At least 67,000 students in the UC system are affected by the cuts, Shiebler said. According to a USSA press release, these would be the largest cuts to student aid in the history of the program.
“This is not only going to discourage students from going to school, but also deny the students who want to go to college,” Shiebler said.
All 200 Democrats in the house voted against the bill. Fourteen Republicans and one Independent also voted no, but 217 Republican representatives supported the bill. Congressman Ed Royce, R-40, of the Orange County area, who received calls as part of USSA’s latest lobbying call-in on the UCSB campus, voted yes on the bill. Local representative Lois Capps, D-23, joined the rest of the house Democrats in opposing the bill.