Congress is working to send the President a bill that provides $20 billion in additional college aid to students – the largest increase since the G.I. bill. It will also increase grant aid and college access for low-income students, and makes the student-loan system work for students, not the banks, by cutting interest rates on loans in half over five years. Yesterday Democratic Senators and Congressmen joined college students at a press conference to discuss Democrats’ efforts to make college more affordable for more Americans, giving every student a chance to succeed while making America more competitive.
Senator Edward Kennedy (D-MA), Chairman, Senate Health, Education, Labor, and Pensions Committee, said at the press conference:
By making college more affordable for young Americans, we not only open doors of opportunity for them, but we equip a new generation of Americans to compete and win in the global economy. Just as the GI bill half a century ago, this bill increases access to higher education for millions of Americans.
Here are some highlights from the College Cost Reduction and Access Act:
The College Cost Reduction and Access Act Will Provide Over $20 Billion in New Student Aid and Benefits – The Largest Increase in Funding Since the GI Bill…According to a recent report on education statistics, twenty years ago, the maximum Pell Grant covered 51 percent of the cost of tuition, fees, room and board at a public four-year college. In the 2005-2006 school year, the maximum Pell Grant covered roughly a third of these costs. Democrats have worked to rectify this decline in the purchasing power of the Pell Grant. Under the College Cost Reduction and Access Act, the maximum Pell Grant will be increased by $500 next year to $4800 and to $5,400 by 2012. [Analysis of Department of Education, NCES data; HR 2669, 2007; A New Commitment to Students and Families: Report by the U.S. Senate Committee on Health, Education, Labor, & Pensions, September 2007]
…..While Reducing the Interest Rate on Student Borrowers. The College Cost Reduction and Access Act reduces the interest rate on subsidized student loans, from 6.8 to 3.4 percent, making student loan repayment more manageable. [HR 2669, 2007]
The Measure Protects Borrowers By Making Repayment Terms Manageable. The College Cost Reduction and Access Act places a cap on monthly student loan payments at 15 percent of discretionary income, so that graduates with significant loan debt can better manage their payments. [HR 2669, 2007]
The College Cost Reduction and Access Act Provides Incentives for Students to Pursue Public Service Employment. The measure provides loan forgiveness if a student borrower spends at least ten years in a public service profession, including military service. In addition, the measure creates incentives for students to pursue careers as teachers by establishing TEACH grants. The grants would provide $4,000 per year for undergraduate students who commit to teaching in high-need school districts. [HR 2669, 2007; A New Commitment to Students and Families: Report by the U.S. Senate Committee on Health, Education, Labor, & Pensions, September 2007]
The College Cost Reduction and Access Act Reduces Subsidies to Lenders and Redirects the Fund to Students. The measure injects competition into the federal loan program and saves taxpayer dollars by including a pilot program that reduces the amount of federal subsidies to student loan lenders. [HR 2669, 2007; A New Commitment to Students and Families: Report by the U.S. Senate Committee on Health, Education, Labor, & Pensions, September 2007]
The College Cost Reduction and Access Act Invests In Minority-Serving Institutions. The measure invests $500 million in minority-serving higher education institutions so they can provide a quality education for students who may not otherwise earn a degree. [HR 2669, 2007]