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Portrait of Rep. Collin Peterson Congressman Collin Peterson -- Minnesota's Seventh Congressional District
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MAKING   COLLEGE

MORE AFFORDABLE

Cutting Interest Rates on College Loans in Half

Republican Record:

Ø      This past February, the Republican Congress enacted a Raid on Student Aid, slashing student aid programs by a total of $12 billion -- making college even less affordable for millions of American families. 

Ø      Under Republican Leadership, interest rates on new college loans for students and parents have jumped by almost 2 percentage points.

Democrats’ College Affordability Package: 

p       Cuts the interest rate on new student loans in half – from 6.8 percent to 3.4 percent.

p       Cuts the interest rate on new parent loans in half – from 8.5 percent to 4.25 percent.

p       Saves the typical undergraduate student borrower, with $17,500 in debt, a total of $5,600 over the life of their loans.  

 

Expanding Tax Incentives to Make College More Affordable

Republican Record:

Ø      Average annual tuition and fees at a 4-year public college have jumped by 57 percent since 2000-2001 – having now reached $5,491.

Ø      Average annual tuition and fees at a 4-year private college have jumped by 32 percent since 2000-2001 – having now reached $21,235.  

Democrats’ College Affordability Package:

p       Expands and simplifies tax credits for college tuition by combining the HOPE credit and the Lifetime Learning credit for undergraduate students and significantly increasing the maximum credit. 

p       Specifically, creates a tax credit of 100% of tuition up to $3,000, the equivalent of a $12,000 deduction for middle-income families in the 25% tax rate bracket.

p       This tax credit would cover 55 percent of the average tuition and fees at a 4-year public college; today, the maximum tax credit covers only 30 percent.

  

Boosting the Maximum Pell Grant by 25 Percent - To $5,100 

Republican Record:

Ø      The Republican Congress has frozen the maximum Pell Grant at $4,050 for four straight years – despite the rise in college tuition.

Ø      The maximum Pell Grant is now worth $900 less, in real terms, than in 1975-1976.

Ø      In 1976, the maximum Pell Grant covered 72 percent of the costs of a 4-year public college; today, the maximum Pell Grant only covers 32 percent of those costs.  

Democrats’ College Affordability Package:  

p       Boosts the maximum Pell Grant to $5,100, helping to make college more affordable for the more than five million students receiving Pell Grants.