For-profit lenders finally get hands off college loans

Banks should not be in the business of lending to students.

ItâÄôs finally time for banks to get their hands out of private education. The Student Aid and Fiscal Responsibility Act was passed by the U.S. House of Representatives last Thursday, marking an important step in reforming how college students pay for higher education. The effort is being hailed as a common-sense overhaul of government funding for college students, taking out the middleman of private banks in favor of the government itself supplying and guaranteeing student loans. More than $90 billion dollars will be saved with the passage of this bill, according to the Congressional Budget Office. Most of this money will be channeled into the Federal Pell Grant Program, increasing the maximum award amount to $6,900 by 2019, up from the $5,500 level available next year, thanks to the American Recovery and Reinvestment Act, popularly known as the stimulus package. The Daily Reveille hails this critically important legislation, as the costs of higher education have only skyrocketed. The average college student graduates with just more than $17,000 in loan debt, according to the Department of EducationâÄôs Web site. Another important change is the simplification of the Free Application for Federal Student Aid (FAFSA), whose complicated online form confused 1.5 million eligible high school seniors from being awarded Pell Grants last year alone. Banks should not be in the business of profiting off the loans of students seeking the critical skills needed to compete in a global economy. Higher education deserves better. Our nationâÄôs undergraduates deserve every chance to succeed in America, and thus to make America succeed with them. The editorial, accessed via UWire, was originally published by The Daily Reveille at Louisiana State University.