Amy Traub

Stimulus for Students (Finally!)

Thank goodness for 2007. Last week, I looked at how the minimum wage increase enacted that year continues to boost the economy today. But that's not the only '07 policy paying off now that we need it most. Consider the College Cost Reduction Act set to provide vital relief to college students in the coming year. The maximum Pell Grant for low-income students is going up. Rates on federally subsidized Stafford Loans are headed down. And a new income-based repayment plan will enable cash-strapped graduates (is there any other kind?) to bring their monthly student loan payments down to an affordable level. Student borrowers working in public service can apply for student loan forgiveness after paying down their college debt for ten years. (For a helpful overview of the improvements, see the Project on Student Debt's new borrower's guide.) None of it comes a moment too soon.

In fact, we need to go further. Congress should swiftly enact President Obama's plan to phase out the pork-laden Federal Family Education Loan program in favor of direct government lending. The move could save billions, which Obama would direct towards funding Pell Grants that automatically increase with inflation. Of course, the private lenders making a killing on federally guaranteed student loans are less enthusiastic about the proposal.

The fact that this modest, commonsense policy has still not been enacted is a sign of the snail's pace of political progress. When the minimum wage increase and student aid bill passed in 2007, DMI called for more aggressive action, while acknowledging House Majority Leader Steny Hoyer's defense that "it takes time to turn a big ship." Reorienting American public policy is indeed a slow process. We are just now seeing some of the fruits of the 2006 election, when Americans voted for progressive change. The good news is, elections matter. Public policy matters.

But we can no longer afford to wait this long.

Amy Traub: Author Bio | Other Posts
Posted at 8:23 AM, Jun 16, 2009 in Education | Progressives
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