On Wednesday, the U.S. House of Representatives voted to cut $19 billion in federal subsidies to student lenders over five years, and increase grants for needy students and cut interest rates in half on federally backed loans with the savings.
The bill passed, 273-149, with 47 Republicans joining Democrats.
While it appears that President George W. Bush opposes some elements of this bill, it is likely that some overhaul of student aid will become law before the end of the year.
The bill comes right on the heels of recent publicity about discriminatory practices in student loan programs. New York Attorney General Andrew Cuomo has been vocal about non-federal student loan programs that he claims might be giving preferential treatment to students attending Ivy League schools in favor of students attending predominantly black schools.
Cuomo has teamed with Senator Charles Schumer (D-NY), a member of the Senate Banking Committee, to introduce federal legislation that would require complete and clear disclosure of student loan terms and fees on every loan application. "A disclosure law would help consumers understand what they are getting into and enable them to comparison shop, bringing down interest rates," said Schumer.
Discriminatory practices mar student loan programs