Chet Edwards For Congress

February 24, 2006
Local college students fear high interest rates, loss of student loans

Waco Tribune Herald
By David Doerr | Tribune-Herald staff writer

McLennan Community College student Pepper Jones is what some consider a prime example of students struggling to put themselves through college. She's also the sort of student who may suffer because of Congress' massive cuts in financial aid.

The mother of four, Jones, 26, says she's at the crossroads of her education, trying to decide if it's worth it to fulfill her dream of becoming a first-grade teacher. She doesn't want to change her major to pursue another career so she can graduate sooner, but she might consider it if she's unable to get federal financial aid to pay for college.

U.S. Rep. Chet Edwards, D-Waco, used Jones as an example of students who might be hurt after Congress, by the narrowest of margins, cut $11.9 billion from federal college student financial aid over the next five years. It's the “largest reduction in federal student aid in our nation's history,” he said.

Edwards held a press conference Thursday with MCC President Dennis Michaelis and Elton Stuckly, Texas State Technical College president, to speak out against the cuts, signed into law by President Bush this month.

Ironically, the job Jones might have to settle for - that of a medical transcriptionist - pays more than teaching.

“You have to choose between money and what you truly want to do - and money will probably win hands down,” said Jones, who is in her second year at MCC and has $14,000 in loans to repay. “I'm just wondering how I'm going to pay them back if interest rates keep going up.”

The legislation, part of the Deficit Reduction Act of 2005, will cause students and parents to pay higher interest rates on federal student loans and reduce financial aid for low-income students by changing eligibility formulas for Pell Grants, Edwards said.

While the average cost of tuition and fees at four-year colleges has risen by 40 percent in the past five years, some students, already facing high gasoline and utility bills, are being forced to defer dreams of a college education, Edwards said.

For those who do continue college, rising interest rates on student loans are making them think twice about how much debt they're willing to accumulate by the time they graduate, he said.

If the cuts were going to reduce the national debt, Edwards said, he could understand the reasoning for such reductions. Instead, the cuts are paying for a tax cut for dividend income earners for people making more than $1 million a year on investments, he said.
“I don't think members of Congress or the president's cabinet ought to be getting tax cuts paid for by making college less affordable,” he said.

U.S. Rep. John Carter, R-Round Rock, disagreed with Edwards' assessment of the budget cuts in a statement issued after the press conference. “The Deficit Reduction Act expands access to college and improves student benefits by encouraging a more efficient and effective government,” Carter said. “This bill takes important steps to reduce the federal deficit while continuing to support the needs of all Americans.”

On Thursday, Edwards, a member of the House Appropriations Committee, vowed to push for reversal of the cuts and urge others in Congress to reject the Bush administration's 2007 budget proposals eliminating certain vocational education programs, ending funding for federal Perkins loans and freezing funding increases to the federal Pell Grant program.
Perkins loans are for students with exceptional needs, providing borrowers with a fixed 5 percent interest rate. Low-income students are also eligible for Pell grants, which do not have to be repaid.

Budget writers say the cuts are necessary to eliminate ineffective and duplicative programs. However, several college students who participated in Thursday's press conference said the cuts would only worsen their already difficult financial situations.

“Anything that takes away money from our budget causes us to take money from somewhere else,” said Robert Kent, a 38-year-old MCC engineering student who works at Subway to help pay for college as well as six children. He says he relies on financial aid to keep the gas tank filled and the electricity on.

MCC President Michaelis said he was particularly worried about losing funding for vocational and technical programs that have helped the college purchase equipment such as mannequin simulators that are used to train lab technicians and other health professionals. Last year, the college received $712,635 from the program.

“In terms of billions of dollars in (the federal) budget, that money doesn't mean much,” he said, “but I'll tell you what - to this college, it means everything.”
Stuckly said TSTC relies heavily on the vocational program funding, which amounted to about $1.5 million last year.

“Anytime you start talking about $1.5 million,” he said, “the anxiety level goes way up because we need it.”