The U.S. House of Representatives passed the Student Aid and Fiscal Responsibility Act Wednesday, which would invest almost $500 million in financial aid for students throughout Wisconsin.
The act would increase the maximum annual Pell Grant to $5,550 by 2010 and $6,900 by 2019, compared to the current $4,050.
The act would move all future federal loans into the Direct Loan program and attempt to simplify FAFSA forms with the goal of making applying for student aid a smoother and more reliable process.
The bill would also expand the Federal Perkins Loan Program, which provides low-interest loans to students.
Members of the Associated Students of Madison, however, said after taking a closer look at the act they believe it may adversely affect UW-Madison students who receive aid through the program.
""Under the current law, Perkins Loan interest rates don't start occurring until nine months after you graduate, so that's almost five years of not having interest,"" Adam Johnson, chair of the ASM Legislative Affairs Committee, said.
""Under the new proposal, they can occur immediately, so that can add up to almost 40 percent of the cost of the loan.""
Johnson said the act may also cancel loan forgiveness provisions for teachers and nurses.
""With such a big education and nursing school here, that's another big problem for us,"" he said.
Johnson said ASM plans to work with other student governments throughout Wisconsin to show their disapproval for the legislation, which will now move on to discussion in the U.S. Senate.
