Local students discuss impact of bill President signed today

From the office of Congressman Gary Peters
Tuesday, March 30, 2010

Student Aid Reform Will Reduce the Deficit, Reduce Government Payments to Big Banks, Increase Pell Grants for Over 180,000 Michigan Students, Allow 820,000 More Students to Grants Nationwide

Representative Gary Peters, local students and administrators met at Oakland Community College this afternoon to discuss legislation directly affecting local students and colleges that President Obama signed today.

The new program will save taxpayers $61 billion dollars by redirecting government student loans to the Direct Loan program rather than running the loans through private banks, which take fees for acting as middle men. The savings will be used to reduce the federal deficit and to expand Pell Grants to help middle class families afford tuition.

“College tuition and rising living expenses are not cheap for a middle class student,” said Matthew Campbell, a Royal Oak resident and OCC student majoring in business administration. “If I didn’t have Pell Grants I would not be able to afford college. An increase in my Pell Grant will go a long way and is relieving news. I think it’s great that more students will have access to grants as well. It’s good to see a Member of Congress working to solve a problem that directly impacts me and people I know.”

“By cutting the big banks out of the equation, we can save taxpayers billions of dollars,” said Rep. Peters. “There’s no reason we should continue the current system that lets big banks skim billions of taxpayer dollars out of the federal student lending program. This plan will save taxpayers over sixty billion dollars and the savings will be used to pay down the deficit and help middle class families better afford the rising cost of college. This is exactly the sort of common sense solution that has become all too rare in Washington.”

“Here at OCC we are extremely pleased about the new investments to bolster community college career training programs, which are a major part of OCC’s offerings to the community,” said Dr. Timothy Meyer, OCC Chancellor. “We applaud these efforts to help more students get a higher education while at the same time strengthening community colleges.”

The Student Aid and Fiscal Responsibility Act is the single largest investment in higher education ever, all while saving taxpayer money. 181,767 students in Michigan received Pell Grants last year. This legislation would use the savings it generates to provide 820,000 more students access to Pell Grant scholarship across the country by 2011. It will also increase the maximum annual Pell Grant from $5,350 to $5,550 in 2010 and to $5,975 by 2017. Starting in 2013, the scholarship will be indexed to keep up with inflation. The legislation will also use savings it generates to develop and improve career training programs at community colleges like OCC, cap student loan payments at 10% of discretionary income and to reduce the federal deficit by billions of dollars.

This legislation connects two of Gary Peters’ top priorities. Peters has made helping middle class families afford college tuition a top priority. One of the first bills he authored upon coming to Congress last year would provide up to a $5,000 per student tax credit for tuition and related expenses for up to five years of higher education.

Peters has also earned a reputation as a fiscal conservative for consistently standing up for deficit reduction: he’s successfully fought against congressional pay raises, has voted to cut hundreds of billions of dollars in spending and was one of only 19 Democrats to vote for a domestic spending freeze last year, has repeatedly voted against increasing the debt ceiling, supports PAYGO and a bipartisan debt commission, is one of only a few Democrats calling for a total ban on earmarks and he returned $135,000 of his own office budget to taxpayers and wrote legislation that would require other Members’ office saving to be returned to taxpayers as well.