The MichiganDaily - Friday,, ttober 13, 1995 -- 3
M S A
With proposed changes to federal financial aid facing a vote in Congress,
MSA is lobbying against the cuts, telling legislators that
a ' ,
The Michigan Student Assembly
this week passed resolutions
opposing the following
congressional bills, which relate
to federal support for students in
These bills are all scheduled to
face votes on the House and
Senate floors starting Oct. 18.
Departments of Labor, Health and
Human Services, and Education
Elimination of interest-free grace
period: This part of the proposal
would either remove the six-
month period or reduce to four
months students' grace period
after graduation to postpone
repayment of student loans.
20-percent cap: The committees
have proposed a 20-percent cap
on the amount of federal
financial aid colleges and
4 universities can receive, based
on total tuition income. If a
school collects $10 million for
tuition in a year, the
government would cap the
amount of federal loans at $2
rmillion. The school would have
to absorb any losses.
$750 million cut: The proposal
would cut $750 million in
funding from the administration
of direct and guaranteed loan
Also known as the Student Loan
Privatization Act of 1995
Cutting direct loans: The House
Economic and Educational
Opportunities Committee has
approved this plan to eliminate
the direct federal direct student
loan program. Under an
amendment to the original draft
- which would have simply cut
direct loans - the federal
government would distribute
$1.8 billion to facilitate loans
through banks and private
lending institutions, passing
along $18 billion annually in
loans for higher education
Charged with the task of
balancing the federal budget by
2002, both the House and the
Senate have drafted reconciliation
proposals, which cut spending
and programs and will be enacted
as law. After the House and the
Senate committees complete
their proposals, the two chambers
will vote on the plan, which if
passed, is sent to the President
for his approval or veto.
0.85-percent solution: The Senate
committee approved a 0.85-
percent fee paid by universities
on total loan dollars.
Universities would not be
allowed to pass this fee on to
students by raising tuition. This
would apply to Stafford Loans
and Pell Grants. This would
By Michelle Lee Thompson
Daily Staff Reporter
F PROPOSED CUTS to higher education
funding pass upcoming votes on the
House and Senate floors, 12,000
University students stand to lose almost
$80 million in loans.
The Michigan Student Assembly
External Relations Committee, headed
by LSA Rep. Fiona Rose, doesn't want
to let that happen - and MSA is lobby-
ing legislators to try and stop it.
"This is not a student-friendly time in
Washington, D.C.," Rose said. As much
as 77 percent of cuts in House and
Senate reconciliation proposals come
directly from education spending, while
only 23 percent comes from all other
"It sets a really scary precedent for
education in this country," Rose said.
tee leads lobbying
efforts on the fed-
eral, state and city
levels through stu-
Federal and Statef
Schor, an LSA jun-
ior, coordinates let-
paigns and other
with legislators, in-
cluding a trip today
to Washington to
visit with lawmak-
ers including Rep. is
(R-Bloomfield r o ns
Hills), Sen. Daniel bring
(D-N.Y.), and Sen. of the s
Carl Levin (D-
Mich.). (to the a
Schor, Rose and
MSA President of our p
Flint Wainess are
travelling to the offlciali
nation's capital to
attend a conference
of the National As- MSA's extE
sociation for Stu- cor
dents in Higher
The three said they plan to lobby
against specific proposals now in the
House and Senate: a student loan
privatization act, a House appropria-
tions bill and a Senate reconciliation
"It is MSA's responsibility to bring
the needs of the students to the attention
of our public officials," Rose said.
"What the External Relations Commit-
tee needs to do is focus on tenacious
lobbying. The bills up for consideration
now were presented in June.
"By developing a consistent approach
to lobbying, we'll be able to attack
these deleterious measures before they
work their way through committee and
to the floor," Rose said.
The ERC works on some issues with
the Associate Vice President for Gov-
ernment Relations Thomas Butts, the
University's lobbyist in Washington.
"They've been doing an effective job
in representing U-M students," Butts
said of the committee.
"It's clearly important to make people
understand what the facts are," Butts
said, adding that the University and the
ERC are on the same side of the finan-
cial aid debate.
Although many ofthe proposals await
House and Senate votes next week,
they have been in committee since early
in the summer. Butts said the commit-
tee was at a disadvantage working on an
academic year calendar, but student
nance Chair Probir
Mehta have also had
work with legisla-
tors during the sum-
ing in D.C. is alive
and well, but only
in certain areas,"
Mehta said. "We
have to apply pres-
sure to legislators
constantly. Too of-
ten, we wait until a
piece of legislation
is out of committee
bllty o and ready for a
vote. We need to
nip the problem in
tiention Edna Yang, the
recently initiated a
- Fiona Rose University stu-
nal relations dents' parents.
mittee chair Yang said the
was to inform par-
ents of current leg-
islation and compel parents to write to
their senators and representatives.
The committee has expanded its ef-
forts in networking with other colleges
and universities this year. Rose said the
trip to Washington will allow it to meet
with student lobbyists from Penn State
and other institutions..
Schor estimated that the ERC has
represented nearly 750,000 students
from the University and other Big Ten
institutions through lobbying with those
"All of these are federal issues and
they affect us all the same," Schor said.
Butts said collective lobbying was
"It is evident that individual students
and student organizations like NASH E
can affect and have been affecting in a
positive way the student loans debate,"
Business Rep. Randy Hardin initi-
ated a project last summer to help Uni-
versity students get more information
about current legislation, as well as
contact their legislators.
That project is MSA On-Line, a
World Wide Web page that allows stu-
dents to e-mail their representatives and
"Randy had the idea of making it
easy to contact legislators and we put
that together on the web page," Wainess
MSA has sponsored visits to campus
by legislatorsincluding U.S. Rep. Lynn
Rivers (D-Ann Arbor).
Although this year is the first year for
the federal direct student loan program,
already the program would be elimi-
nated by a House committee's proposal.
Students would instead rely on the Fam-
ily Federal Education Loan Program.
In 1993-94, the University dealt with
1,400 lenders, guarantors and servicers
in providing financial aid.
"Congressman (Ernest Jim) Istook's
(R-Okla.) recommendation that direct
loans be killed in favor of privatized
guaranteed loans represents a serious
threat to students' ability to receive
funds quickly and easily," Rose said.
MSA passed a resolution Tuesday
opposing the privatization proposal,
urging "Congress and its members to
vote against privatizing the loans in-
dustry, and instead focusing on ways to
increase funding to the efficient, suc-
cessful direct loans program."
MSA sends each of its resolutions to
federal legislators, including Michigan's
16 representatives and two senators.
"The whole reason we are going to
D.C. is to defend direct loans," Rose
Schoralso criticized the privatization
proposal, saying it would deny students
access to loans.
"It creates a more elitist society,"
Rose said, "This school could be well
on its way to privatization."
Butts said MSA's lobbying efforts to
preserve the year-old program were
A Work Study
Total: $44.2 million
Total: $50.6 million
Financial Aid Officer Melinda Stone discusses a student financial aid package with an undergraduate student.
"All of a sudden there is a national
constituency that didn't exist last year
and that dynamic hasn't fully settled
yet," Butts said.
"That's why it's important that people
let other people know what works for
MSA also passed a resolution last
week to oppose a House appropriations
bill that would slash $4.5 billion from
higher education and the Department of
Education, including a $750 million in
funding from loan programs.
The bill would cap federal aid to
universities at 20 percent of the institu-
tions' total tuition income, as well as
eliminate or shorten the grace period on
repayment of student loans.
"The bill is terrible because, while
trying to protect the financial future of
America, Congress is limiting the abil-
ity of our nation's youth to attend col-
lege and thus make themselves suc-
cessful in the future," Schor said..
"As representatives of the student
body, MSA members must actively fight
for things that will benefit the students,
especially in areas that will allow stu-
dents to attend school and remain there
long enough to obtain their degree,"
MSA has rallied against the proposed
reconciliation law in the Senate, but has
not voiced that same opposition to a
reconciliation proposal in the House.
The House proposal includes Istook's
privatization legislation, in the form of
cutting funding to the federal direct
student loan program.
Rose said a proposal to tax universi-
ties based on the amount of loan dollars
they take in would cost students and the
"The proposed 0.85-percent tax on
student loans amounts to taxing Kroger
for the amount of food stamps it ac-
cepts," Rose said. "The measures are
antithetical to the notion that education
should be a right and not a privilege."
The fate of
Wainess said he is extremely op-
posed to proposed cuts to funding for
AmeriCorps, Clinton's project to in-
volve college graduates in paid com-
"Federal direct student loans should
not be capped," Wainess said. "The
inner substance must be preserved
and AmeriCorps ... should be ex-
Funding to AmeriCorps is eliminated
in the Housing and Urban Develop-
ment and Veterans' Administration
Appropriations Proposal, though the
proposal is still subject to presidential
"We have a number of appointments
and we're going to do some pretty hard-
core lobbying as well as alerting the
President," Wainess said.
One of the main parts of MSA's lobbying effort in Washington
is geared to protecting student loans. Here's a breakdown of
where student aid at the Unviersity comes from.
Students say they know little about proposals
By Jeff Eldridge
Daily Staff Reporter
LSA first-year student Dena Pruitt is not happy
about plans bouncing around Congress to change
the federal student loan system in the drive to
balance the federal budget.
"It makes me angry," Pruitt said. "It affects me,
and I would have liked to know this. (Congress)
could send out a notice to affected students, or
(Congress) could send out a notice to
affetd students, or something. I was not
aware of this at all.
- Dena Pruitt
LSA first-year student
grace period in repaying student loans.
"It's pretty silly to think someone just graduat-
ing from college is going to be able to repay their
student loans," Harbage said. "The whole point of
the grace period is to allow someone to get a job
and get settled before they pay as much as $300 a
month in student loans.
"It's just not possible."
Fletcher emphasized viewing the policy changes
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