Tom Harkin Wants To Take Money From College Students To Pay Reviled Loan Contractors

Tom Harkin Wants To Take Money From College Students To Pay Reviled Loan Contractors


http://m.huffpost.com/us/entry/6278920

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The Pell program is the nation’s largest source of grant aid for college students, according to the White House, and is meant for students from low- and middle-income households. Three of every four students who took out Pell grants during the 2012-13 award year had household incomes of $30,000 or less, according to the Department of Education. Nearly 8.9 million students are forecast to receive on average $3,826 from the program during the 2015 fiscal year, White House budget documents show. The neediest students can receive a maximum of $5,830.

The program has a surplus that the Congressional Budget Office in April predicted will evaporate and turn into a deficit by the 2017 fiscal year, which begins October 2016. Some analysts have said they fear the deficit will come sooner. Harkin wants to use that temporary pot of money to enable the Education Department to increase pay for student loan companies that collect borrowers’ monthly payments.

Student advocates said they’re outraged.

“I am appalled that Senator Harkin would put servicers -- who profit by hundreds of millions of dollars a year -- over the needs of low-income students,” said Alexandra Flores-Quilty, vice president of the United States Student Association. “Taking funding out of Pell and using it to pay private student loan servicers goes directly against the interests of students.”

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