Commentary: Bravo for overhaul of student loan system

-The overhaul of the federal college-loan program approved last week by the House of Representatives is such a no-brainer that one wonders why it hasn't been done before.

It cuts out the middle man by eliminating the fees paid by the government to private lenders, saving some $87 billion over the next decade, according to the nonpartisan Congressional Budget Office. That alone makes this legislation worthwhile — but, wait, there's more.

One provision promises to streamline the loan-application form, a measure that will bring joy to the heart of any parent who has ever tried to help a son or daughter fill out the so-called Free Application for Federal Student Aid form.

The form is so frustrating and difficult to complete that, according to the Department of Education, more than 1.5 million college students who likely were eligible to receive Pell Grants in 2003-2004 didn't apply for financial aid because they found it too confusing.

Under the House bill, half of the amount in savings realized by the overhaul would go toward new Pell grants, the main federal college scholarships for low-and moderate-income students. The cost of the loans would not change, but the maximum Pell grant scholarship would increase from $5,550 in 2010 to $6,900 by 2019. The current ceiling is $5,350.

All of this makes a difference for the millions of American families with children either in college or on the way. About 5.5 million students use these loans each year, and higher education is not getting cheaper.

To read the complete editorial, visit The Miami Herald.