Wu to introduce financial aid bills

First district U.S. Congressman David Wu visited Portland State University last week to announce he will introduce three bills in the Congress to ease the burden of student financial aid loans.

Wu said he would introduce the bills when the Congress reconvenes this week. He made the announcement at a lectern set up in front of the financial aid office in Neuberger Hall last Thursday.

“These bills will remove unfair restrictions that prevent student loans from being consolidated more than once,” Wu said. “They will eliminate the cap on tax deductions for student loan interest payments. And they will urge the Congress to increase Pell Grant awards to the full authorized amount.”

In Wu’s view, the Congress must do its part to make higher education affordable, because a person really needs higher education to get by in today’s economy.

He was joined at the lectern by three students – past and present – who are struggling with loan repayment. They were Jose Cienfuegos, a deputy district attorney for Multnomah County; Laura Young, a graduate student at Portland State; and Sara Fox, a student at Pacific University. All three spoke of their difficulties in repaying their massive loans and how they would benefit from Wu’s bills.

“Tuition and fees for a four-year college education have risen 115 percent over the inflation rate in the past 22 years while median household income has risen only 20 percent,” Wu said.

One of Wu’s bills would remove the dollar cap on the student loan interest deduction for eligible taxpayers. The law now allows only $2,500 deduction of that interest each year.

The Pell Grant full-funding resolution would express the sense of the House of Representatives that Pell Grants should be fully funded to the maximum authorized grant of $5,800 per year.

The current cap on Pell Grants is $4,000. Wu said this covers less than 40 percent of the average cost. Wu exhibited figures showing that 85 percent of Pell Grants go to students from families with annual incomes below $30,000. Wu referred to 2000 census figures that showed more than 79,000 Oregon families live on incomes under $15,000.

His third bill, which he calls the student loans fairness act, would affect students who have sought to consolidate their student loans with more favorable interest rates.

Under current practice, a student who has already consolidated student loans once may not reconsolidate them.

The restriction prevents students from taking advantage of lower interest rates that would give them substantial savings in repayment. It also would allow them to shop around with multiple lenders to get the best interest rate. Currently, borrowers must first approach their current lenders if they wish to consolidate their loans.

Laura Young told her story of a mother who formerly helped her with her education but because of illness was no longer able to do so.

Young dropped out temporarily to work full time. After six years, she was able to enroll at PSU to finish her degree.

“After three years of undergraduate work and one year of graduate work at PSU, I now owe $34,000 in principal alone on my student loans,” she said. “I expect this amount will increase by as much as $36,000 by the time I finish my master’s degree.”

Wu’s bill to remove the cap on loan interest deduction, she said, would probably mean the difference between achieving her dream of owning a home or renting.”

Cienfuegos, a graduate of the Lewis & Clark College of Law, said he has more than $100,000 in student debt, and he has already consolidated once. He said in order to meet his debt obligation, he could enter private practice and earn more money. However, he wants to continue to work in the public service, prosecuting crime.

“I want to work where I can do the best work for public service,” he said.

Fox is a single mother and full-time student at Pacific University. She also works full time and is already carrying $20,000 in student loans. Because of cuts to Oregon’s student financial aid programs, she recently lost grant money. An increase in Pell Grants would benefit her greatly.