By a vote of 96-0, the U.S. Senate approved a bill on Tuesday to extend the Higher Education Act, which covers federal student aid, for five years. Along with preserving current student aid programs, the bill calls for an increase in spending on Pell Grants and a decrease in interest rates on student loans. The bill’s sponsor, Rep. Bill McKeon (R-Calif.), said the bill will help ensure the future of a strong student aid program. “It is very important to keep the private student loan program alive, and this bill accomplishes this goal while preserving the lowest student loan interest rate in 17 years,” he said. The Senate vote came only a day after the House of Representatives approved the bill by a unanimous vote. President Bill Clinton (SFS `68) has said he would sign the bill. While the bill has received support from the majority of the higher education community, it has come under fire from some who say that the rate cuts on refinanced loans are too short term and that the bill makes it harder for students to get rid of debts through bankruptcy. Some have also criticized the bill for a provision to cut off federal aid to students convicted of a state or federal drug offense. cKeon said he was glad to see such an important bill pass through a Congress otherwise sharply divided. “With Washington divided on party lines on so many issues today,” he said, “it is remarkable to bring together congressional Republicans, Democrats, student groups, educators and the financial community to gain consensus.” The university’s reaction to the bill’s passage, and in particular its increase in Pell Grant levels and decrease in interest rates, has been very positive. Jenn Raley, assistant to the dean for financial aid at Georgetown, said that “the reaction in our office is that it’s really good.” Along with maintaining all six current student aid programs, the bill’s main components are as follows: an increase in the maximum Pell Grant to $4,500, an increase in the amount a student can earn and still qualify for a Pell Grant, lower loan interest rates, a clause to forgive student debt for two years after graduation if the student teaches in a low-income school, a revocation of financial aid to students convicted of a drug offense unless they participate in a rehabilitation program and a clause to expand requirements for reporting campus crime statistics. The bill also creates a Performance Based Organization within the Department of Education that will focus on streamlining the student aid process. “For the first time, the day-to-day management of the student aid programs will be in the hands of someone with real-world experience in financial services,” a press release from McKeon’s office said. The bill also includes Sen. John Warner’s (R -Va.) amendment to the Family Education Rights and Privacy Act, which allows universities to report a student’s alcohol- and drug-related arrests to their parents. cKeon said, “We are committed to making it easier for everyone to gain the benefits of a college education by streamlining federal bureaucracy and lowering costs.” cKeon also praised the bill’s focus on technology. Not only does it call for an upgrade of the computer systems involved in student loan payments, but it also gives support to distance education projects, such as Internet-based education. “This [bill] looks to the future,” McKeon said. On Tuesday, the American Council on Education, on behalf of a group of higher education associations, sent a letter to Congress in support of the bill. However, the letter’s author, ACE Senior Vice President Terry Wattle said “several areas need continuing education.” Wattle said that the ACE and other associations “will work with Congress to achieve a longer `window’ to enable students to consolidate their loans at the low rate approved in the bill,” and would “revisit the punitive bankruptcy provisions.” Wattle also said that he was concerned that the bill did not do enough to prevent student loan fraud. The bill also received praise from Education Secretary Richard Riley, who said in a press release, “I believe this bill is a positive step forward for students, teachers and the future of higher education.” However, Riley echoed Wattle’s concern over certain provisions in the bill, and vowed to work with Congress on them. Another issue that has caused some concern is the stripping of federal student aid from students convicted of federal or state drug offenses. The provision’s author, Mark Souder (R-Ind.), said, “I hope this legislation will encourage all young people to avoid drugs or to get help if they are already using them.” However, the Department of Education said in a press release that it thought the provision was redundant because federal judges already have the power to strip aid from drug convicts, and thus the bill removes judicial discretion.

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