January 31, 2006 - Assemblymember Laird and 69 Colleagues Urge U.S. Congress to Stop Largest-Ever Cut to Student Aid

Sacramento, CA – Joined by 69 California state legislators, Assemblymember John Laird (D-Santa Cruz) today sent a letter to Speaker Hastert urging him remove the $12.7 billion cut to Federal Student Financial Aid Programs from the 2005 Federal Deficit Reduction Act. The cut, the largest ever in the history of federal student financial aid programs, accounts for nearly one-third of the total amount of cuts proposed in the deficit reduction act.

“Should Congress include this cut, there will be a devastating ripple affect for current and future generations of middle class college students in California ,” said Assemblymember Laird. “The goal should be how to reduce the financial burden for students in order to invest in our future, rather than how to add to students’ debt load in order to reduce the current federal deficit.”

In recent years federal financial aid grants have decreased while the amount students borrow to keep up with rising college costs have increased. This, coupled with the $12.7 billion proposed cut will result in students taking even longer to pay off debt and will force future graduates to use a larger proportion of their income to meet required minimum loan payments.

“Currently, 39% of college graduates have unmanageable loan debt,” said Felicia Cruz, University of California Student Association Board Chair . “If the bill before Congress passes, $12.7 billion will be cut from student loan programs forcing California families to pay even more for their education, take out more loans and pay more in interest charges.”

"Cuts to student loan programs affect middle-income students the most,” said Jennifer Riemer, Chair of the California State Student Association Board of Directors. “These are the students and families who do not qualify for grant aid, but are still unable to afford the rising cost of higher education."

S 1932 is scheduled to go before Congress tomorrow, February 1, 2006 .

LETTER TO HASTERT:

January 31, 2006

The Honorable Dennis Hastert, Speaker
House of Representatives
United States Capitol
Washington , D.C. 20515

Dear Speaker Hastert,

We are writing on behalf of students, parents and constituents of the State of California to respectfully request that you and your colleagues do not approve the proposed $12.7 billion cut to Federal Student Loan Programs included in the Federal Deficit Reduction Act of 2005.

As elected members of the California State Legislature, we understand the challenges of developing budgetary measures. However, we believe that the proposal before Congress disproportionately balances the budget on the backs of students and working families. Of the estimated $39.7 billion savings proposed in this measure, nearly one third of it will come from cuts to student aid programs. If this measure were to pass, it would be the single largest cut to student aid programs ever.

As you are aware, students today are graduating with greater loan debts than ever before. According to the California State University system, U.S. Department of Education data shows nearly 40 percent of recent college students are leaving school with unmanageable monthly student loan payments. At a time when the cost of providing and pursuing higher education is increasing at a rapid rate, and students and their families are relying on loans to pay for college costs, increasing student loan interest rates will only make college unobtainable for more students and repayment of loans more challenging for those who can attend.

One effect of this change may be to inhibit borrowers from taking lower-paying public service jobs, such as teaching. These higher education costs would disproportionably affect underrepresented and low-income working families. Since a greater proportion of these students and their families rely on student financial aid (especially loans) to access and afford college, they would be forced to endure a greater share of these cuts.

According to California ’s Legislative Analyst, federal funding coming to California would be significantly reduced due to the increased borrower interest rates and reduced lender profits. Although these reductions would be partially offset by an increase in federal benefits, it would still significantly increase costs for borrowers, severely impact lenders and guarantors’ ability to provide necessary loan services, and jeopardize the extensive default prevention services they currently offer. We should not be taking action to increase student debt while at the same time risking states’ ability to offer student loan default programs and services.

It is our hope that you will strongly consider removing, or at least substantially reducing, the $12.7 billion reduction to federal student loan programs. At a time when students are borrowing more than ever before to pay for higher education, as tuition costs continue to rapidly increase and as grant aid fails to keep pace, we need to do all that we can to alleviate the debt burden we are placing on our nation’s students.

We appreciate your taking the time to consider our input on this matter and would be happy to address any questions or concerns you or your colleagues may have on this matter.

Sincerely,

JOHN LAIRD

Joined by:

Senator Richard Alarcon, 20^th District

Senator Elaine Alquist, 13^th District

Senator Debra Bowen, 28^th District

Senator Gilbert Cedillo, 22^nd District

Senator Wesley Chesbro, 2^nd District

Senator Denise Moreno Ducheny, 40^th District

Senator Joseph Dunn, 34^th District

Senator Liz Figueroa, 10^th District

Senator Dean Florez, 16^th District

Senator Christine Kehoe, 39^th District

Senator Sheila Kuehl, 23^rd District

Senator Alan Lowenthal, 27^th District

Senator Carole Migden, 3^rd District

Senator Kevin Murray, 26^th District

Senator Deborah Ortiz, 6^th District

Senator Gloria Romero, 24^th District

Senator Jack Scott, 21^st District

Senator Joe Simitian, 11^th District

Senator Nell Soto, 32^nd District

Senator Jackie Speier, 8^th District

Senator Tom Torlakson, 7^th District

Senator Edward Vincent, 25^th District

Assemblymember Juan Arambula , 31^st District

Assemblymember Joe Baca, Jr., 62^nd District

Assemblymember Karen Bass, 47^th District

Assemblymember Patty Berg, 1^st District

Assemblymember Rudy Bermúdez, 56^th District

Assemblymember Ronald Calderon, 58^th District

Assemblymember Joseph Canciamilla, 11^th District

Assemblymember Wilma Chan, 16^th District

Assemblymember Edward Chavez, 57^th District

Assemblymember Judy Chu, 49^th District

Assemblymember Rebecca Cohn, 24^th District

Assemblymember Joe Coto, 23^rd District

Assemblymember Hector De La Torre, 50^th District

Assemblymember Mervyn Dymally, 52^nd District

Assemblymember Noreen Evans, 7^th District

Assemblymember Dario Frommer, 43^rd District

Assemblymember Jackie Goldberg, 45^th District

Assemblymember Loni Hancock, 14^th District

Assemblymember Jerome Horton, 51^st District

Assemblymember Dave Jones, 9^th District

Assemblymember Betty Karnette, 54^th District

Assemblymember Johan Klehs, 18^th District

Assemblymember Paul Koretz, 42^nd District

Assemblymember Mark Leno, 13^th District

Assemblymember Lloyd Levine, 40^th District

Assemblymember Sally Lieber, 22^nd District

Assemblymember Ted Lieu, 53^rd District

Assemblymember Carol Liu, 44^th District

Assemblymember Barbara Matthews, 17^th District

Assemblymember Cindy Montañez, 39^th District

Assemblymember Gene Mullin, 19^th District

Assemblymember Joe Nation, 6^th District

Assemblymember Pedro Nava, 35^th District

Assemblymember Gloria Negrete McLeod, 61^st District

Assembly Speaker Fabian Núñez, 46^th District

Assemblymember Jenny Oropeza, 55^th District

Assemblymember Nicole Parra, 30^th District

Assemblymember Fran Pavley, 41^st District

Assemblymember Mark Ridley-Thomas, 48^th District

Assemblymember Ira Ruskin, 21^st District

Assemblymember Lori Saldaña, 76^th District

Assemblymember Simón Salinas, 28^th District

Assemblymember Alberto Torrico, 20^th District

Assemblymember Tom Umberg, 69^th District

Assemblymember Juan Vargas, 79^th District

Assemblymember Lois Wolk, 8^th District

Assemblymember Leland Yee, 12^th District