Proposed Bush plan gashes loan programs

guarantors could earn was the right way to pay for it,” according to The Chronicle.

Bush’s proposed spending plan, if approved, could eradicate one-third of government programs in the U.S. Education Department. Loans like the Perkins Program, the Leveraging Educational Assistance Partnership Program (LEAP) and the Robert C. Byrd Honors Scholarship Program would be eliminated while some savings from these would be deposited into larger Pell Grants.

The proposed spending plan of $2.57-trillion for 2006 is both “good and bad news for lowincome students,” according to The Chronicle of Higher Education. The Pell Grant maximum of $500 would be raised to $4,500 over the next five years and while some college leaders are accepting and satisfied with possible change, others weren’t so fond of the idea. APennsylvania Democrat, U.S. Rep. Chaka Fattah, termed the proposal “nonsensical and utterly irresponsible.”

According to The Chronicle, those satisfied with possible change, however, were not accepting of the elimination of the Perkins Loan Program, which Bush-administration officials say would be eliminated because of its limited reach. The Chronicle says with these changes, colleges would be required “to return the federal share of the money they used to make the new Perkins Loan to students from low-and middle-income families.”

Cabrini currently allocates $120,000 each year in Perkins Loans to financial-need students. Between $1,000 and maximum of $2,000 is distributed to 80-90 students. Mike Colahan, director of financial aid, said, “Bigger colleges have more at stake; they’ll feel the impact” if the plan is passed. Scholarships and grants are given and the Perkins is a small augmentation to that, however, they are “getting trimmed as well.” Although it has no been finalized, Colahan said, the Work-Study Program is expected to go down as well as the Federal

Supplemental Educational Opportunity Grant (SEOG).

Elimination of LEAP, a program in which the federal government matches the dollar-fordollar amount a state spends on need-based aid to low-income students. Removing this would call upon no changes being made to the monetary amount given by the government for Federal Work-Study and Supplemental Educational Opportunity Grants for the next year

Money to pay for the $19 billion cost of the plan was never proposed in the plan; it would be funded strictly from the savings through changes. The President would save $6 billion through elimination of the Perkins Loan program. Additionally, another $3.7 billion would be saved by changing the now refinancing program of borrowers being locked into a 30-year low fixed interest rate to borrowers being charged a variable rate. “Public Interest Research Groups, said the proposal would ‘cost students thousands of dollars in increased interest payments,’” according to The Chronicle. Costs in running the program would save $10.4billion.

“Loan industry officials said they supported the president’s plan to increase the maximum Pell Grant but did not believe reducing the amount lenders and