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Bush Proposes to Raise Pell Grants and Lower Private Lender Subsidies for College Student Aid

By Erik Folgate

Whether this was something initiated by Democrats or Republicans, Congress and the Bush administration are finally getting it when it comes to the level of student debt floating around the country.  Today, USA Today reports in this article that Bush plans on raising the pell grants for low-income students by about 25%, and he’s going to lower the amount of subsidies to private lenders such as Sallie Mae who dominate the student loan sector. The banks are saying that this will put a monopoly on government run student aid and students will receive IRS-quality customer service.  I say, go cry about it some more you corporate bank crooks!  Their profit margin will still be plenty fat even by reducing the government subsidies.What this will do is put more money into the pockets of students who come from lower-income families.  It will also reduce the amount of money students have to borrow to cover school costs.  Current pell grant levels are enough to cover tuition, but if you went through four years of college, you know that the tuition is not the expensive part.  Books, food, rent, and other necessities add up quickly and the $7 an hour part-time job just doesn’t cut it sometimes.  I am a strong advocate of college students working while in school, but it is not fair to kid who have no support from their parents to be working 60 hours a week and missing out on some of the college experience.  This is a good thing and Congress and the Bush administration should be applauded for it. 

 

Erik Folgate
Erik and his wife, Lindzee, live in Orlando, Florida with a baby boy on the way. Erik works as an account manager for a marketing company, and considers counseling friends, family and the readers of Money Crashers his personal ministry to others. Erik became passionate about personal finance and helping others make wise financial decisions after racking up over $20k in credit card and student loan debt within the first two years of college.

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