Few community college students benefit from subsidized loans, I write in U.S. News and World Report. “Community college students, who tend to come from low- and moderate-income families, rely on need-based Pell grants, which, unlike loans, don’t need to be repaid.”
While President Obama — and Mitt Romney — call for spending $6 billion to subsidize Stafford loans for another year, Pell is expected to run $7 billion short next year. This year, the maximum grant amount was saved only by cutting aid for year-round students and limiting eligibility.
“Targeting a precious $6 billion right now to borrowers who have jobs and incomes high enough to cover the higher rate seems out of touch, especially when the Pell Grant program needs approximately that much next year to stave off a massive cut to the aid it provides,” writes Jason Delisle, director of the Federal Education Budget Project at the New America Foundation in Washington, D.C. Stafford borrowers already can postpone payments if they fail to find work or earn too little, he notes.
Lots of middle-class and affluent families benefit from federal loan subsidies and tax credits — and they vote.