Kaine: Loan reform will make college affordable

The Daily Lobo sat in on a conference call with the head of the Democratic National Committee and the head of the College Democrats of America.

Tim Kaine, chairman of the DNC, and Katie Naranjo, president of the CDA, held the conference call Tuesday to discuss the new Student Aid and Fiscal Responsibility Act.
The SAFRA is attached to the health care bill and will make college more affordable for students, Kaine and Naranjo said.
Kaine said the bill will free up $68 billion in federal funds, which will go to help lower the cost of student loans.
“It eliminates subsidies that are just not in it to private bankers by switching to a system of direct lending for federal student loans,” he said. “This will save taxpayers the subsidy amount, which is $68 billion over the next 10 years. SAFRA meets the pay-as-you-go fiscal responsibility principles.”

Naranjo said President Obama supported the bill to help Americans afford a college education.

“Recently, Obama addressed the issue of college affordability, declaring that no one should be denied an education simply because they can’t afford it,” she said. “We’re very lucky that we have not only a president that listens to young people on our issues but to have members of Congress who will help him and enact more legislation like this.”

Obama set a goal to improve Americans’ competitiveness in the world, Kaine said.
“He set a very ambitious goal of having the highest percentage of college graduates in the world by 2020,” Kaine said. “Beginning 20 or 30 years ago, other nations started to pass us by, and now, by some measures, we’re ninth or 10th in the world. And if we don’t do something different, more nations will continue to pass us.”

This bill gives more funds to colleges than any bill in the history of the country, Kaine said.
“This is the single largest investment in higher education in the history of this country, and it’s going to enable us to regain and sustain a competitive advantage in the global marketplace — all of this done simply by ending the practice of subsidizing financial institutions,” he said. “Now, financial institutions are still going to have a

significant and important role to service the loans, but they will not be getting the dramatic subsidy for originating the loans.”
The bill specifies that all student-loan processing will be handled within the U.S., Naranjo said.

“Today, jobs were created (because) 100 percent of the direct loans will be serviced by private lenders in the U.S.,” she said. “And today, students and family members have a peace of mind that going to college and seeking opportunities won’t cost an arm and a leg.”
Kaine said the bill will not create any further budget deficits or cost money to taxpayers.

“For those who are concerned about federal spending, they should be very happy about this, because what we’re doing is we’re taking a program and we’re going to save $68 billion in subsidies that were being paid by the federal government to financial institutions,” he said.
The bill is important to the future of the American economy, Kaine said.

“When a student doesn’t have that financial access to education, or they can’t afford to finish their degree or training program, it’s not just that student that suffers; it’s the entire economy,” he said. “SAFRA’s going to help students realize their dreams of getting affordable higher education.”