A Bush administration study panel has withdrawn a proposal to eliminate most federally backed student aid after protests from colleges, students and banks.

“The current situation doesn’t allow the commission an opportunity to understand the details or defend the idea,” Charles Miller, chairman of the Commission on the Future of Higher Education, wrote to fellow commissioners Wednesday.

Miller, in a draft version of the commission’s final report that he circulated last week, included a proposal that would allow federally backed loans only for low-income students.

His withdrawal of the idea removes from consideration a plan that opponents warned could hurt 5 million students and veterans, and cost them an estimated $32 billion in benefits.
“It shows the concept couldn’t stand up to public scrutiny,” said Luke Swarthout, a higher-education specialist with the U.S. Public Interest Research Group, a policy group in Washington, D.C.

Miller’s panel, formed last September by Education Secretary Margaret Spellings, is due next month to issue its final report on ways of making college more affordable and relevant to U.S. economic needs. It is to meet today in Washington to review the draft of its final report.
The draft circulated last week proposed a 45 percent increase in the main federal grant program for college students. In part to help fund that and other shifts toward programs benefiting low-income students, the plan suggested eliminating the 75 percent of federal loan programs that are not based on financial need.

University and student groups protested, saying the commission failed to understand that much of that lending comes at no cost to the federal government.

Even banks expressed concern, because the additional protection of a federally backed loan helps lenders serve middle-income students who otherwise might not be eligible, said John Dean, special counsel to the Consumer Banking Association.

“Current student-loan lenders would have significant concerns about the elimination of most of the student loan programs,” said Dean, whose association represents banks such as Citigroup Inc., Bank of America Corp., JPMorgan Chase & Co., and Wells Fargo & Co.

This entry was posted by Taman Siswa on Saturday, August 12, 2006 at 3:08 pm and is filed under Education News, Student Loan. Tags: College, Education News, Grant, Loans, Student, Student Loan, Study, . You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.