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May
6, 2001
Midnight
Budget Guts Student Aid Funding, Gives Banks and Lenders $6.6
Billion Boost
Congressional
leaders killed last week's budget agreement to spend an additional
$6 billion on education programs in the discretionary part
of the budget. The rejected agreement maintained the core
of Senator Harkin's amendment to provide enough funding for
a $600 increase in the maximum Pell Grant for this fiscal
year and for continued increases beyond this year.
In what
seemed to be a last ditch effort to push even more funds towards
tax cuts, the Congressional leadership tried Thursday night
to force through a revised budget that would result in a $1
billion cut for education. This new budget would kill both
Senator Harkin's amendment and President Bush's $1billion
proposal for student aid, and lead to cuts in education funding.
Adding
insult to injury, the last minute budget deal also included
a budget rider that will provide lenders with as much as $6.6
billion for increased subsidies to the FFEL loan industry.
This rider, sought by loan industry lobbyists, is a half step
towards implementing lowered interest rates on student loans
that are scheduled to go in to effect in 2003.
What is
bitterly disappointing about the huge increase in loan industry
subsidy is that it provides incredible sums of taxpayer money
to the loan industry without doing anything to ensure that
the federal government will be able to provide the scheduled
reduction in interest rates for students. All of this at the
same time as making devastating cuts to grant based student
aid programs.
Late Thursday
night the House of Representatives had to delay passage of
the budget resolution because of technical problems and both
the House and Senate are now expected to vote on the budget
this Tuesday.
Action:
Call your
Senators and Members of Congress immediately and urge them
to reject this backroom budget deal. Let them know that we
should not be spending billions more on the loan industry
while cutting grants to students. Congress should support
the increased spending provided for by the Harkin amendment
that was originally agreed to by the Senate.
Call your
representatives by using the student aid hotline 1 (800) 574-4AID.
Senate
Switchboard: (202) 224-3121
House Switchboard: (202) 225-3121
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