Last spring, following the announcement that the Republicans' Contract With America would involve large cuts in financial aid to students, students held a rally to "save financial aid" on March 29, coinciding with President Bill Clinton's visit to campus.
Seven months later, both the House and the Senate have passed reconciliation legislation--largely altered from original plans due to nationwide student protests and efforts--with varying stipulations in each chamber that collectively may cut student loans by up to $10.8 billion over the next seven years if passed by Congress and signed by President Clinton.
One student, however, is not giving up the fight. Shami Feinglass, a third-year student in the medical school, has been working as a legislative coordinator with the Organization of Student Representatives (OSR), which comprises 250 students, under the Association of American Medical Colleges (AAMC). Last spring, she coordinated a trip to Capitol Hill for medical students to protest the forthcoming legislation and rally for changes and support in federal funding for education.
Feinglass said that the students found a receptive audience for their message. "If this is a nation that wants a diverse population and education, this is not the way to go about it. The Hill was surprised, and they have been responsive--all we're asking is for them to make cuts somewhere else first."
This may be merited, considering that college students and their families borrowed $23.1 billion in 1994 and are likely to borrow more than $50 billion a year by the year 2000, according to "College Debt and the American Family," released by the Education Resources Institute, a loan-guarantee agency, and the Institute of Higher Education Policy, a research organization. Changes in federal policy for student loan programs, which mainly came about in 1992 during the reauthorization of the Higher Education Act, raised annual loan limits and have prompted college students and their families to borrow more than $100 billion since 1990.
According to Steven Moye, associate vice president for government relations, Emory received "a little more than $51 million from the federal government for the 1994-95 academic year." Because of this dependence, Moye says that there are three developments of interest to Emory that will impact the future of student financial aid: FY96 appropriations, reconciliation, and the tax portion of reconciliation.
As far as FY96 appropriations are concerned, the Senate Appropriations Committee completed its version of education funding with significant improvements for student aid over the House bill, according to Moye. The Supplemental Educational Opportunity Grant (SEOG) and Federal Work Study programs were funded at FY95 levels, the same as the House. Emory receives $897,164 from SEOGs, and there are approximately 1,293 recipients of federal work-study. The Pell Grant maximum was increased to $2,440, the same as in the House. The Senate committee, however, did not change the Pell Grant minimum. The House version would cut 280,000 students from the program, under which Emory receives almost $1.5 million, by raising the minimum grant to $600. Perkins Loans would receive $100 million in federal capital contributions under the subcommittee plan, down from the FY95 $158 million. The House eliminated Perkins Loans federal capital contributions, under which Emory receives $2,263,657. Currently, members of the Senate have filibustered the appropriations bill passage, and it is unclear when it will be reconsidered. The House has passed their bill and is waiting on the Senate. "The FY96 appropriations for student financial aid should come out okay," Moye said. "As soon as the Senate takes up or votes again on their appropriations bill, we should get a clearer picture on the final outcome of the conference." He added, "This information could change on a daily basis."
The Senate Labor and Human Resources Committee approved its reconciliation legislation Sept. 26. The package would cut the federal student loan programs by $10.8 billion over the next seven years. Tenets of the Senate legislation would impose an annual tax on colleges of 0.85 percent of loan volume; eliminate the interest exemption on student loans during the six-month grace period for new borrowers; increase the interest rates on PLUS loans by 0.75 percent; and place a cap on direct lending at 20 percent of annual student loan volume--which would force out between one-third and one-half of institutions that currently participate in direct lending. Emory, which does not participate in this program, would not be affected.
"Over the long run, in dealing with reconciliation and trying to balance the budget by 2002, some programs will be hit," Moye said. "However, I feel that the Senate will certainly not allow the institutional tax on student loan volume to make it to conference. I'm hearing that the six-month grace period also will survive." Meanwhile, House reconciliation legislation, passed Sept. 28, does not impose an institutional tax on loan volume, but it would eliminate direct lending and the interest exemption during the grace period for all new loans, increase the interest rates on PLUS loans by 0.9 percent and cut fees paid to lenders, guarantors and secondary markets.
When the House and Senate committees complete action on their budget reconciliation responsibilities, each chamber will roll its committees' legislative packages into omnibus budget reconciliation bills, and the various measures (e.g. student loans, Medicare, farm subsidies) will be voted upon en bloc. The House and Senate each will vote on their own omnibus bills, after which House and Senate conferees will meet to hammer out differences between the two bills. If the House and Senate each approve the conference report that emerges from these deliberations, the final budget reconciliation agreement will be presented to President Clinton for his signature or veto.
Feinglass is currently in Washington, D.C., with other members of OSR to visit the Hill and rally for their cause. Feinglass encouraged other members of the Emory community to be involved as well. "People can get hold of their senators and representatives by calling, e-mailing or faxing them," she said. "If the staff members don't hear from people, they assume they don't care. Anyone can call the Capitol switchboard at (202) 224-3121, and they will connect you to your representative's office. I find it unacceptable for people to just go along--don't complain about it later. We want to keep a ground flow of activity going."
--Danielle Service