Democrats have financial aid on the Jan. agenda

A newly elected Democratic majority in Congress could spell changes for college affordability, experts say.

When the 110th Congress convenes this January, the Democrats will have slight majorities in both houses - and, if the party's leaders remain true to campaign promises, financial-aid reform will be one of their top priorities.

These possible changes could affect the roughly 50 percent of Penn undergraduates who receive some sort of federal financial aid, according to Penn Director of Financial Aid Bill Schilling.

The party has already proposed several changes that it would like to enact during the first 100 hours of the session, said Jim Boyle, president of College Parents of America, an advocacy group.

One of these possible changes is to raise the maximum legal size of the Pell Grant, a federal financial-aid grant, from $4,050 to $5,100.

Currently, the average Pell Grant for Penn students is $2,900, Schilling said.

This proposed increase would be the first since 2002 and is likely to garner bipartisan support, he added.

Another proposal is to reduce the interest rates on federal student loans, including the Stafford Loan. But Boyle said that this more controversial move would be "easier said than done."

The reduction would be costly, and budgetary concerns could discourage Republicans and more conservative Democrats from voting for the proposal, said Haley Chitty, spokesman for the National Association of Student Financial Aid Administrators.

A third proposal is to re-establish an expired law that allows families with incomes lower than $160,000 per year to deduct up to $4,000 of tuition from their tax returns, Boyle said.

He added, however, that this proposal is not likely to pass quickly, since Congress examines tax issues very carefully.

And even if these measures pass as soon as the Democrats take office in January, they would not take effect until the 2007-2008 academic year.

While many higher-education groups favor the Democrats' proposals, they admit that the reforms are not guaranteed, especially given the federal deficit and the party's narrow majority, Chitty said.

He said his group is very encouraged by the Democrats' rhetoric and hopeful that they'll follow through. Still, the organization has adopted a "cautious optimism" because the reforms face many challenges.

Boyle said the higher-education community experienced a state of euphoria when the election results came in, adding that many believe that the Democratic majority will be much more sympathetic to colleges than the Republicans have been.

Schilling said he is "confident that there will be some growth in support for student-aid programs. It just remains to be seen how much."

While both parties are concerned about the rising costs of college, Republicans tend to hold the universities themselves accountable for their price hikes, while Democrats are more willing to use government resources - in the form of loans and grants - to help out families, Boyle said.

"In the new Congress, there will be more scrutiny of the student-loan industry than of colleges and their tuitions," Boyle added.

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