Pell Grant Purchasing Power Graph

According to an article in the New York Times, the House Committee on Education and Labor will be introducing legislation this week along the lines of President Obama’s proposal to cut wasteful subsidies to student loan companies and use the $87 billion in savings to make college more affordable for low and middle income students.

Loan companies circulated at least 13 different plans on Capitol Hill, lobbied furiously against the President’s proposal, and finally (almost) uniting around a single “Frankenstein” counter-proposal. It now looks like these efforts have failed to influence the shape of the legislation that will be considered in the House Education and Labor Committee. According to the New York Times, the lender counter-proposal was rejected principally because it would redirect around $15 billion to banks that, under the Obama proposal, would otherwise be available to expand the Pell grant program.

The Obama proposal still faces a tough fight in Congress, however. We hope lawmakers follow the lead of Rep. Miller and other champions for students on the House Education and Labor committee by continuing to put college affordability and access over bank profits and campaign contributions.

*Cross-posted at Students Over Banks, a new Campus Progress campaign to cut subsidies to student loan companies, and use the $87 billion in savings to make college more affordable. Visit Studentsoverbanks.org to take action!