Budget Impact on Students
The budget bill makes it even more difficult for the poor and middle-class to afford college. Many students will have no choice but to join the military.
Under the bill, college students would pay higher interest rates on loans. Many banks will receive lower subsidies. And the Education Department will work with the Internal Revenue Service to ferret out students and parents who underreport incomes on financial aid applications. The budget bill is estimated to save $39.7 billion over the next five years. Student aid accounts for $12.7 billion of the savings, or 32 percent.
Republican negotiators said virtually all the cuts in student aid would be borne by banks and other lenders, an assertion sharply disputed by Democrats and college administrators, who said that two-thirds of the savings would be at the expense of students and their families.
Even as it makes those cuts, Congress is creating a new program for students from low-income families who are eligible for Pell grants. The amount of aid will not be based on financial need. To qualify, students would have to be United States citizens, have completed "a rigorous secondary school program of study" and be taking courses full time at a "degree-granting institution of higher education."
The student would have to maintain "a cumulative grade point average of at least 3.0." Juniors and seniors will be eligible only if they have declared a major in the physical or life sciences, computer science, mathematics, technology, engineering or a foreign language deemed critical to national security.
College and university groups, as well as most Democrats, opposed the overall bill.
"This is the biggest cut in the history of the federal student loan program," said David Ward, president of the American Council on Education, an umbrella group for public and private colleges and universities.
A lobbyist at the council, Becky H. Timmons, said, "Students will be paying higher interest rates than they are currently paying."
The rate would be fixed at 6.8 percent for students and 8.5 percent for parents. The current rates, which vary with market conditions, are several percentage points below those levels.
The new aid for freshmen and sophomores is known as academic competitiveness grants. Freshmen would be eligible for $750 grants, and sophomores for $1,300 grants. Juniors and seniors would be eligible for $4,000 a year in what Congress calls Smart grants. The name is an acronym for "science and mathematics access to retain talent."
The Senate majority leader, Bill Frist, Republican of Tennessee, said the new support for math and science education would increase America's ability to compete in a global economy.
"China and India are generating scientists and engineers at a furious pace while America lags dangerously behind," Mr. Frist said.
The bill would not change the maximum Pell grant, which has been $4,050 for several years. President Bush had proposed a $100 increase. The bill would increase the maximum amount of subsidized loans, to $3,500 and $4,500 for first- and second-year students, from $2,625 and $3,500.
Senator Edward M. Kennedy, Democrat of Massachusetts, said the math and science program would abandon the Pell grant principle that the neediest students should receive the most help.
"Under this proposal," Mr. Kennedy said, "a single mother who can attend college only part time because she has to work 40 hours a week to put food on the table will not be eligible for a penny in new grant aid."