By David R. Kazak

A proposed federal charge which could have SIUC students collectively paying more than $500,000 a year came one step closer to passage Monday when a Senate committee passed a $10 billion-plus spending-cut package.

If the proposal, which is sponsored by Sen. Nancy Kassebaum, R-Kan., becomes law, SIUC will have to pay a .85 percent charge on the total volume of federal loans it processes$42 million per year according to the financial aid office. That would be nearly $30 for each SIUC student.

Advertisement

SIU Chancellor Ted Sanders said the University would have no choice but to pass such a charge onto the students. It just would not be possible, he said, for the school to absorb the cost of the charge.

We don’t have that kind of slack to pick up, Sanders said. We can’t go to the state. We will have to cut services. We may have to take to modifying our tuition plan.

One way or another, students will pay, Sanders said.

The proposal passed the Senate Labor and Human Relations Committee, which is in charge of federal student loans.

The spending-cut package includes many items which directly impact different aspects of federal student loans, including a 20-percent participation cap on the direct student loan program, the elimination of government interest payments during the six-month grace period students receive after they leave school and an increase in the interest rate for PLUS-loansthe chief loans parents take out for dependent college students.

Both Sanders and SIUC Financial Aid Director Pam Britton said they were disappointed with Monday’s vote, but Britton expressed hope that there might still be a compromise somewhere down the road.

I wouldn’t say I’ve given up, she said. But people really need to talk to their legislators to try and change what has happened.

Advertisement*

Britton said one of her strongest concerns with the GOP-sponsored spending cut package is the 20-percent participation cap on direct student loans.

The current level of participation in the direct loan program is more than 30 percent. The proposal will limit that level at 20 percent, so some schools will have to either drop out of the program or be forced out.

What worries me is that of the institutions I know of who are part of the program, well, they are all happy with it, Britton said. I don’t see too many schools volunteering to leave the program.

I do see schools being forced out.

Britton said it was too soon to tell if SIUC would be one of the schools which would lose its ability to stay with the program, and she said she is hoping for some sort of compromise.

Sen Paul Simon, D-Ill., a member of the labor committee, said he was disappointed with the vote but not surprised. The vote, he said was sharply partisan, with eight Republican votes for the package and seven Democrats voting against it. Only one Republican, Sen. James Jeffords, who chairs a Senate education subcommittee, abstained.

Simon said he cannot believe voters and taxpayers want to cut education, and he said he would fight the bill when it reaches the Senate floor sometime in the next two or three weeks.

I’m not certain we can win the fight, Simon said. I’m not sure if it’s probable. I only know we have a good chance because it’s been done before.

Simon tried to get the $10 billion spending cut figure down to $4 billion, and the Senate did vote for the drop but then raised it back up again. Simon said he is hoping that the Senate will again vote against the $10 billion cut.

Kassebaum spokesperson Michael Horak said it is not the Republican’s intentions to hurt education.

These are difficult decisions, Horak said. It’s painful for everyone involved, even Senator Kassebaum.

Horak said he hoped students do not end up paying the .85 percent charge, but that is a possibility. Also, he said students should not be upset about losing the interest subsidy during the six-month grace period.

Students have a pretty good deal as it is, Horak said. This is not an unreasonable request. They can pay the interest themselves when they leave school.

These proposals will not affect any students who have student loans now, Horak said.

This will only affect those who get loans from here on out.