HIGHER EDUCATION—Robert Barron, a UC-Davis student, talks to reporters about a CALPIRG report on the high cost of college textbooks. CALPIRG researched and released the report, Rip-Off 101: 2nd Edition, to highlight the fact that soaring college text prices, much like decreasing financial aid, represent financial obstacles to those seeking a college education.

California college students could receive $246 million in additional student aid from the federal government without costing taxpayers a dime, according to a new report called Easy Money: How Congress Could Increase Federal Student Aid Funding At No Additional Cost To Taxpayers.

Easy Money was released this past May by CALPIRG along with other state PIRGs in concert with the U.S. Student Association and the American Association of Collegiate Registrars and Admissions Officers.

The federal government spends billions of dollars each year subsidizing banks and private lenders to provide student loans through the Federal Family Education Loan program.

At the same time, the federal government also operates the Direct Loan program, which eliminates the middlemen financ ial institutions and saves taxpayers nearly $11 on every $100 loaned, according to President Bush’s 2006 budget documents.

Legislation has been introduced with bipartisan support in both houses of Congress to direct more lending toward the Direct Loan program.

The Student Aid Reward (STAR) Act was introduced in the House of Representatives by Reps. George Miller (Calif.) and Thomas Petri (Wis.).

This past April, a companion bill was introduced in the Senate by Sens. Gordon Smith (Ore.), Ted Kennedy (Mass.) and Richard Durbin (Ill.).

“At a time when the cost of higher education is skyrocketing, this is an opportunity for the federal government to dramatically increase student aid at no additional cost to taxpayers,” said Merriah Fairchild, CALPIRG’s higher education advocate.

“It’s a win-win proposal to make college more affordable,” added Fairchild.

Widespread Benefits
Students in the University of California system could receive up to $39 million a year in additional student aid, while students in the CSU system could receive up to $47 million per year.

The STAR Act would provide colleges and universities with incentives in the form of additional student aid to use the Direct Loan program in favor of the more expensive Federal Family Education Loan program.

The terms and conditions on these loans are the same; the only difference between the two programs is the cost incurred by the federal government.

“Private lenders will want to keep their slice of the pie, but we’re hopeful that the common-sense appeal of this bill helps us overcome any industry opposition,” concluded Fairchild.