If someone told you a piece of legislation would cost at least an additional $217 billion dollars within 5 years you’d probably ask for a little more information as to what was going to be done with all that tax money. You would think that legislation would spell out some pretty specific uses for that money.

“The Secretary shall make Student Aid Reward Payments to institutions of higher education on the basis of estimates, using the best data available at the beginning of an academic or fiscal year.” (Section 489A d 5 A) Ok, so money would go to schools based on the best information they have as of Jan. 1.

So how much money? Ah, it says see subsection c.

“The amount of a Student Aid Reward Payment under this section shall be not less than 50 percent of the savings to the Federal Government generated by the institution of higher education’s participation in the student loan program under this title that is most cost-effective for taxpayers instead of the institution’s participation in the student loan program that is not most cost-effective for taxpayers.” (Section 489A c)

Ok, but what does that mean? If a college participates in the program considered the best student loan program they’ll get a reward for choosing well. But how much money is that? And who decides which program is best?

And we know Congress isn’t really known for its math skills so there must be a simple formula to follow, right? Here it is – the reward will be at least 50% of the difference between the loan program the college used and the loan program they didn’t use. Well at least that’s clear. Each student loan will be compared to an imaginary student loan and if the difference is positive the university will get a check for 50+% of that difference.

But all this tracking and confusion will directly help students, right? Well…

Yes, the reward is supposed to be used by the universities to give to students in the form of grants, but the bill doesn’t say when the grants will be distributed. The bill does explain which students will receive the grants. If a student has a Federal Pell Grant and the university deems them worthy, a student might get an additional grant.

So the government will give real money to a university based on an imaginary number and the university will decide when and to whom that money will trickle down to. I’m sure glad we aren’t being asked to just throw away $217 billion! At least the universities will make some money.

We are opposed to the proposed student loan legislation and middle-class families should be too! The government is taking money out of YOUR POCKET.

It only takes one minute to make a difference: call your senators, send your senators an e-mail, download a letter to fax to your senators, become part of our petition and help your friends find out the truth about the proposed student loan legislation.