After a full 10 years of contacting representatives, gathering signatures, writing articles, and spreading the outrage, Students for Sensible Drug Policy, along with hundreds of supporting organizations was sure their determined efforts would finally pay off and that Congressional leadership would follow through with their pledge to repeal the counterproductive Aid Elimination Penalty of the Higher Education Act. However, we have yet again been terribly deceived.

    If you’ve ever wondered why you’re asked about drug offenses when applying for federal financial aid through FAFSA, thank Representative Mark Souder (R-IN), who somehow managed to slip the AEP into the Higher Education Act in 1998 without any debate or vote. Since then, this amendment has denied over 200,000 students federal financial aid, and in turn access to education. While we assume the reasoning behind Souder’s action was that he thought it would decrease drug abuse, it’s done the exact opposite by forcing students to drop out of school, therefore increasing their risk of drug abuse and criminal activity.

    Regardless of the penalty's intentions, it has blatantly attacked hard-working students, people of color, and the lower and middle class. Since the FAFSA already requires satisfactory academic progress in order for a student to be eligible for federal financial aid, the AEP only affects hard-working students who have been doing well in school. While African-Americans make up a fairly small portion of the population, racial profiling leads to an absurdly disproportionate higher number of African-Americans arrested for drug offenses. And since middle and lower class families are depending solely on financial aid, it’s easy to see why wealthy families may not be too concerned.

    Many members of Congress who were on our side initially have informed us that they became terrified of facing negative attacks, fearing they’d be labeled as “pro-drug”. In reality,it is precisely the Aid Elimination Penalty they are supporting that continues to increase drug abuse and decrease education. Anybody who is against racial profiling, increasing drug abuse, and decreasing education should be against this penalty. Please fill out this pre-written letter and demand an explanation from your local legislators! Unless they hear from their constituents, they won’t realize what their people want and will continue to follow their misguided instincts.

In a closed-door meeting Tuesday night, the University of California Regents announced a 5% increase in all executive salaries, with some executives seeing proposed increases as high as 33%. As mentioned in my previous blog, this occurred the same day that President Bush vetoed the College Opportunity & Affordability Act.

While the two are probably not connected, I find it very poignant that they did occur within hours of each other. Some may not realize that the failure to pass the College Opportunity & Affordability Act has left many middle class families in a difficult situation. On the one hand, they are not poor enough to receive financial aid and on the other hand, they cannot afford to send their children to a decent college even for an arm and a leg.

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There’s a must read article posted on Saturday by Michael Kinsley at Slate that takes a fascinating (and depressing) look at corruption in the student loan industry.  The federal student loan program, which has been “stricken by scandal in the recent months,” guarantees loans to students and pays off the interest to banks.  The problem is that the government is paying twice the interest on these loans compared to ones it guarantees for itself to pay off the national debt.  And it's a big problem--the subsidy costs taxpayers four billion dollars a year.  And who’s at the source of the problem?

Not those head-in-the-clouds Democrats. It's Republicans, who adopted the student loan "industry" in its infancy, like a stray cat, and have nurtured it and protected it ever since. There actually is a parallel student loan program that does use government funds. It was started in the early days of the Clinton administration. It costs less to operate, and it has not been tainted by scandal. But when the Republicans regained control of Congress in 1994, they pushed through a law forbidding the Education Department to encourage the use of this program. As a result, direct federal loans account for only 25 percent of all student loans.        

Read more at Slate.

In case you missed it, the New Yorker's financial page had a good explanation of the student loan industry in basic "Intro to Econ" terms. In short, because the government subsidizes the loans, it eliminates risk for lenders, "In effect, lenders get a guaranteed return with very little risk. ... But it’s not very good at getting government money to students cheaply and efficiently." An entire industry has been constructed around the idea that college students should go to college, but the ones who are carrying the risk are the students.