Cuts of $800 Million From Student Loans OKd by House Panel
A House subcommittee agreed Tuesday to a package of revisions that would trim $800 million from the government-backed student loan program over the next three years.
Congress called for savings in the budget resolution for fiscal 1986, which begins Oct. 1. The House Education and Labor Committee is charged with developing a plan to implement the cuts and will consider the package later.
The measures outlined by the House post-secondary education subcommittee would trim $100 million from the program in fiscal 1986, $250 million in 1987 and $450 million in 1988.
The changes include requiring students who seek guaranteed student loans to undergo a test to determine their need for a loan. Currently, only students whose parents’ income exceeds $30,000 are subjected to a needs test.
The program, in which the federal government insures and subsidizes loans, cost the U.S. $3.2 billion in the current fiscal year.
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