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Obama Budget: Thousands More Virginia Students to Receive College Aid


Monday, April 13, 2009   

Richmond - President Obama's budget proposal on education would, for the first time, link the Pell Grant program of student aid to inflation. The move would guarantee low-income college students stable funding, and analysis by the Institute for America's Future finds the change would open the Pell Grant program to 4,757 new Virginia students. To pay for the change, the plan eliminates the four billion dollar annual subsidy paid to private banks that make student loans.

Those opposed to the idea say such a big change to the student loan system shouldn't be tied to the President's budget proposal, but should instead be the subject of separate legislation that receives a full Congressional debate. But Cathy Woodson with the Virginia Organizing Project says that's merely a delaying tactic by the banking industry.

"The banks make money off these loans, and so if the whole loan process were restructured, it would allow the money that traditionally the banks have made to be available to students."

She says the proposed loan program changes puts the focus back on students.

"So they would cut out these expenses that the banks make money on, make it available to students. I don't know if it'll fix all the funding issues, but it certainly will be a benefit. This will help us tremendously and help the students who are here."

Woodson says most Pell Grant recipients in Virginia receive just over $3000 per semester. In Virgina, the cost of tuition at a public four-year college went up six percent last year.

According to the National Center for Education Statistics, the cost of tuition at a public four-year college in Virginia increased 35 percent between 2000 and 2007.

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