Besides last night's great progressive victory on health-care reform, the House also passed (again) legislation that will allow the Senate to use reconciliation to fix our higher-education financing system by ending government subsidies to private lenders:
By ending the subsidies and effectively eliminating the middleman, the student loan bill would generate $61 billion in savings over 10 years, according to the nonpartisan Congressional Budget Office.
Most of those savings, $36 billion, would go to Pell grants, funding an era of steady and predictable increases in the massive but underfunded federal aid program for needy students. Smaller portions would go toward reducing the deficit and to various Democratic priorities, including community colleges, historically black colleges and universities, and caps on loan payments.
The bill's greatest impact would fall on the more than 6 million students who rely on Pell grants to finance their education. Pell, launched in 1973, once covered more than two-thirds of total costs at a public university. It now covers about one-third.
In her closing speech at the end of yesterday's debate, Speaker Nancy Pelosi referred to these investments in health-care reform and education as investments in "equal opportunity for the American people." That sounds about right to me.
-- Tim Fernholz
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