Pioneer Editorial: College aid hike good, keep private

As we get closer to the fall school start, many families are wondering in this tough economy how they are going to afford college.

The House Education and Labor Committee took an important first step Tuesday by approving President Obama's plan to increase Pell Grants for low-income college students.

The bill would link Pell Grants to inflation for the first time since the program was created in 1972, raising the maximum grant from $5,500 to $6,900 over the next decade. The grant provides an important source of funding to allow low-income students access to higher education at a time when tuition is soaring to cover the loss of state aids. Still, it may not be enough.

The Pell Grants increase has a long ways to go, however, with attention focused on how money will be raised to cover the increase. Democrats say they will pay for the hike by ending federal subsidies for private loans, a measure sure to be bucked by lenders who would see the loss of billions of dollars. The bill would replace the subsidies with a massive expansion of direct loans by the government.

By contrast, private lenders made $56 billion in loans to more than 6 million students last year, while the government made $14 billion in direct loans to 1.5 million students.

The increased Pell Grants is greatly needed, but we question the near-total government control of the student loan program. The government may try to restrict steep and frequent interest rate increases -- the current bill also does that - but private sector lenders should be allowed to continue to issue student loans.

What the government does need to do is make it easier for students to obtain grants and loans, and for the private lenders to issue credit. There is no need to make yet another private sector operation publicly controlled.

It is most important that affordable access to higher education be made available to all Americans, across the income spectrum. And increased college aid is a first step.