An agreement struck between lawmakers from the Democratic Party could pave the way for the student loans legislation to be passed. The idea is to include the bill, along with health care legislation, in the budget package, so that both the controversial legislation can be passed without facing the hurdle of a filibuster.
The proposal to significantly overhaul the student loans system has attracted a lot of controversy ever since it was introduced. The proposal suggests an end to government backed education loans by private lenders. The justification given is that private lenders are profiting from the students, but if the government can directly provide loans to students, it would be able to use that money on important initiatives. The government can lend from the treasury at very low interest rates and channel those funds to the students.
One of the main programs that will benefit from the savings generated by the proposal, said to be more than $80 billion, would be Pell Grants. Pell Grants are given to about 8 million students from low income families so that they can pay for their college education. If the bill is passed, the limit of Pell Grants would be increased to $5,500 for next year and it would be further increased every year according to the rate of inflation.
Private banks have been opposing the legislation as it would mean a significant cut in their revenues. Some Republicans have also opposed the bill, saying that the savings estimate was exaggerated and that the bill would harm many non profit lenders who perform important functions like educating students on the college admission process. They also claim that the bill is nothing more than a political gimmick by the Democrats.
Democrats have predicted that the packaging of the bills together would help them pass all three, as they would now need only 50 votes in the Senate. The Democrats control 59 votes in the Senate, and even if some of them choose to vote against the bill, it is not likely to change the outcome. House Democrats also said that passing the package should not be difficult.
The agreement to combine the three bills is a clear sign that the Democrats are beginning to assert themselves after repeated failure of bipartisan efforts. Students throughout the country would be hoping that the bill does not mean more expense or hassle for them.