Election Results Expected to Mean Shift in Federal Student-Aid Policies

The results of the mid-term Congressional elections likely will result in changes in federal student-aid policies, as Democrats take over the majority in the U.S. House and U.S. Senate.

When the 110th Congress convenes next year, Rep. George Miller (D-Calif.) will replace Rep. Howard “Buck” McKeon (R-Calif.), as chairman of the U.S. House Committee on Education and the Workforce. In announcing his intent to seek the chairmanship, Miller said, “We will act quickly to raise the national minimum wage and cut interest rates in half on college loans.”

As part of their “New Direction for America,” House Democrats have vowed to push through the following student-aid changes:

• Cut federal student-loan interest rates in half by reducing Stafford-loan rates from 6.8 percent to 3.4 percent and PLUS-loan rates from 8.5 percent to 4.25 percent.
• Increase the maximum Pell-Grant award to $5,100 from the current level of $4,050.
• Replace current higher-education tax benefits with a tuition tax credit of up to $3,000.

Debate on these initiatives will center on how to pay their costs, which some estimates put to be in excess of $100 billion over 10 years.

When Democrats assume the majority in the Senate in January, Sen. Edward Kennedy (D-Mass.) will replace Sen. Mike Enzi (R-Wyo.) as chair of the Senate Committee on Health, Education, Labor, and Pensions.

The changing of the guard in Congress can be expected to further delay the completion of reauthorization of the Higher Education Act. Democrats are expected to give priority consideration to renewal of the No Child Left Behind law.