House approves bill to make federal government direct lender for student loans
Today the House of Representatives took a step towards modernizing the federal student aid system by passing the Student Aid and Fiscal Responsibility Act. The act will eliminate the government subsidies and guarantees that private lenders get for issuing student loans and will make the federal government the direct lender for student loans.
Estimates are that the government will save $87 billion over ten years by eliminating the subsidies. That money will be used to make sure that interest rates on student loans remain low and expanding the Pell Grant program. The bill also contains promises to streamline the Free Application for Federal Student Aid and expand access to Perkins Loans.
The bill was sponsored by George Miller (D—Calif.) and was passed 253-171 (247 of the votes in favor of the bill were from Democrats and 167 of the votes against it were from Republicans).