STAR act would allow students aid to increase $17 billion

Legislation in the U.S. Congress could bolster student aid by more than $17 billion for universities across the nation over the next ten years.\nThis would mean if the Student Aid Reward Act, or STAR Act, is made law, IU would see an increase of at least 8.7 million in Federal aid money for students who have Pell Grants and Graduate Students in need, a State PIRGs' Higher Education report stated. The bill is both in the U.S. House of Representatives and the U.S. Senate. \nThe kicker is that Congress can do this without any cost to the taxpayer. The Federal Government has two loan programs that students can go through in order to receive aid money for college. It doesn't matter which program the student chooses because the loan they receive is the same. \nFirst, the Direct Loan Program, which sees about 25 percent of all student loan volume, states that a student can directly receive aid money from the U.S. Department of Treasury simply by applying for it. Secondly, a student can apply for money from an outside lending company or bank. This option, the Federal Family Education Loan, states the government subsidizes private lenders and banks to offer loans to college students. If passed, the STAR Act states that a university is to choose between the cheaper of the two programs, which currently is the DL program, and as a result would receive half of the subsidy money that would usually go to the private lenders. \nJason Delisle, a legislative assistant for Congressman Thomas Petri (R-WI), said both the Congressional Budget Office and the budget office for the White House have identified this as an important money-saving idea for taxpayers. \n"(The STAR Act is) the only bipartisan bicameral bill to seriously boost student aid that's out there right now," Delisle said. "That said, the banks have a pretty big lobby and they are going to fight like crazy for that 12 percent subsidy." \nDirector of Federal Relations for IU Doug Wasitis is in Washington D.C. and follows all legislation that could possibly affect IU.\n"Just like any bill that has been introduced that would impact the University we are looking at it but without hearings we are still evaluating it. We are tracking (the STAR Act) right now but certainly don't have a position on it," Wasitis said. "It is unclear if congress will move it or not." \nAccording to Page 371 of the President's budget, FFEL loans cost the government $9 for every $100 in loans. On the other hand Direct Loans save the government $2 for every $100 in loans. \nThe bill was introduced in the House by Reps. George Miller (D-CA) and Petri and in the Senate by Sens. Edward Kennedy (D-MA) and Gordon Smith (R-OR).\nRepresentative Miller said in an e-mail he believes the bill will make college more affordable without increasing cost to the taxpayers.\n"We have a choice: we can either use higher education money to support banks profits; or we can use these funds to help students and their families," Miller said. "This is a win-win bill and I encourage my colleagues to join me in supporting it"