GOSHEN - Congressman John Hall announced the passing of H.R. 3221, or The Student Aid and Fiscal Responsibility Act (SAFRA), to an auditorium full of High School seniors at Goshen Central High School Friday morning and explained to them what impact this piece of legislation would have on their graduating class and all others to follow.

According to Congressman Hall, “H.R. 3221 increases the amount of money available for Pell Grants and other student loans by $40 billion over the next ten years.”The process of making this $40 billion available also, “saves the Federal Government $87 billion.”

The way,  “to make $40 billion available that is not currently available and still save $87 billion over ten years,” Hall explained, “is by cutting out the middle man.”

“The Federal Treasury gives the money to the banks, provides them with an incentive to lend it, and then guarantees it, so we … it’s not just the student’s parents who cosign the loan; the Federal Government guarantees it 100% so the bank has absolutely no risk.”

Changes made by H.R. 3221 to the current student loan aid system remove the banks from the lending process allowing the Federal Government to loan the student money directly. By doing this, the Federal Government no longer pays interest rates to banks when reimbursing them on defaulted loans.

Under this new student loan system, interest rates on government subsidized loans will be kept low and substantial investments in early childhood education will be made. The Perkins low-cost loan program will be expanded to every U.S. college, the loan application process will be made simpler, and student loans will be tied to the consumer price index so that the amount of the loan increases proportionately to the cost of living.