How to make college more affordable

COLLEGE AFFORDABILITY was one of the Democrats’ main campaign promises this year. It was a pledge calculated as much to frustrate Republicans as to please working- and middle-class families. Who wants to oppose giving more students a chance at college?

The outgoing Congress had made itself curiously vulnerable on the issue, cutting funding for Pell Grants, which go to the most impoverished students, and moving too slowly to end unnecessary subsidies to private lenders, though the worst were eventually eliminated. To ease the situation, Democrats are suggesting four remedies. Three of them have merit.

• Increasing funding for Pell Grants and raising the maximum annual grant, which hasn’t increased in four years, to $5,100 from $4,050. Only students in families that earn less than $45,000 a year qualify for Pell Grants. Last year, the average grant was lower than in 2003-04. Because many Pell students attend public colleges, the grants go a long way toward covering their expenses.

• Increasing to $12,000 from $4,000 the amount of college tuition that families can deduct from their taxes. Tax deductions are one of the few ways to make college more affordable for middle-class families, which often get insufficient financial aid and have difficulty paying for college costs that can hit $40,000 a year.

• Reviving the so-called Star program proposed by Sen. Edward M. Kennedy (D-Mass.), which foundered in Congress last year. Under this program, the federal government would expand its direct-loan program by offering loans through universities that choose to join, rather than through private banks. Much of the savings from this less-costly system would allow these universities to give more students financial aid.

Currently, about a fourth of federal loans are made through the direct program; increasing that to half would save up to $1 billion a year. But eliminating the subsidized private-lending program altogether isn’t desirable either. Competition has made both programs more efficient. Kennedy’s proposal strikes the proper balance.

The Star program should eliminate any need for the fourth Democratic proposal: cutting the interest rate for federal student loans in half, to 3.4%. The cut would cost about $3 billion a year but would reduce a graduate’s monthly payment by only about 14%. The difference won’t keep anyone from attending college.

Some Republicans have made the argument that giving students more financial assistance will only encourage colleges to raise their fees. This has it backward. Students need more financial assistance to cope with rising college fees. At any rate, Republicans would be better off working with Democrats to help make college more affordable for working families — of any political stripe.