The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

Financial aid bill would better fund loan program

The Student Aid Reward Act, also known as STAR, was presented to both the House of Representatives and the Senate on Feb. 13. It was originally introduced in 2005 by Rep.,”

A bill that could give college students access to significantly more financial aid was reintroduced to Congress last week.

The Student Aid Reward Act, also known as STAR, was presented to both the House of Representatives and the Senate on Feb. 13. It was originally introduced in 2005 by Rep. Tom Petri (R-Wis.) and Rep. George Miller (D-Calif.) but did not gain much support and was never brought to vote.

"The leadership at the time would not allow it to move forward," said Tom Culligan, legislative assistant for Petri. "The idea was to encourage colleges to use the most efficient federal aid programs and reward them for using those programs with more Pell Grants."

There are two federal student loan programs: Direct Loan and Federal Family Education Loan. Money for Direct Loans comes directly from the federal government, and students pay the government back directly. Money from FFEL loans comes from private lenders and is insured by the government.

"The Direct Loan Program is less costly to taxpayers because it eliminates the need for an intermediary, cuts out unnecessary subsidies for private lenders and raises loan capital at lower rates," said Rick La Torra, the University of Wisconsin-Madison's campus organizer for the Wisconsin Public Interest Research Group, in an e-mail.

WISPIRG is a nonprofit organization that works to raise awareness on college campuses and influence the media and lawmakers to take action on certain issues. WISPIRG has student groups on several UW campuses.

STAR would reward colleges that choose Direct Loan over FFEL by giving back some of what they save in the form of Pell Grants.

"STAR wouldn't make anyone change, but lets the school choose what's best for its students," Culligan said.

According to Culligan, STAR would nationwide save $13.4 billion, $10 billion of which would go back to students in Pell Grant aid.

The state of Wisconsin alone would receive $15.5 million in Pell Grants.

"It's a win-win situation," Culligan said.

The bill comes at a time when college tuition costs go up significantly each year. It would provide much-needed aid to students who are accumulating debt.

"It's a powerful step in the right direction as it finally puts students before lenders along with making school more accessible and affordable. Relief is long overdue and we're glad to see Congress is taking action," said Johanna Adams, a student at the University of Wisconsin-Milwaukee and a WISPIRG board member, in an e-mail.

If the bill passes, Marquette would benefit from it because it already uses Direct Loan.

Marquette's Office of Financial Aid was contacted, but was not familiar with STAR.

There is currently no date set for when STAR will be voted on, but Culligan said he thinks the prospects look good.

"We're optimistic about its chances," he said. "We'd like to see students contacting their congressmen to get the support we need."

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