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WASHINGTON, DC -- U.S. Rep. George Miller (D-CA), chairman of the House Education and Labor Committee, today introduced legislation that would make the single largest investment in college financial aid since the GI Bill, helping millions of students and families pay for college – and doing so at no new cost to U.S. taxpayers.
The legislation, the College Cost Reduction Act of 2007, would boost college financial aid by nearly $20 billion over the next five years. The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry. It also includes $750 million in federal budget deficit reduction. The Education and Labor Committee will vote on the legislation later this week.
“This is a tremendous, historic step towards realizing the goal of making college affordable for every qualified student in the country,” said Miller. “For years, college costs have been growing rapidly, far outstripping families’ ability to pay them. With this bill, we are saying that no one should be denied the opportunity to go to college simply because of the price.”
Under the legislation, the maximum value of the Pell Grant scholarship would increase by $500 over the next five years. When combined with other Pell scholarship increases passed or proposed by Congress this year, the maximum Pell Grant would reach $5,200 by 2013, up from $4,050 in 2006, thus restoring the Pell’s purchasing power. Roughly 5.5 million low- and moderate-income students would benefit from this increase.
The legislation would also cut interest rates in half on need-based student loans, reducing the cost of those loans for millions of student borrowers. Like legislation passed by the House earlier this year, the College Cost Reduction Act would cut interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years. Once fully phased-in, this would save the typical student borrower – with $13,800 in need-based student loan debt – $4,400 over the life of the loan. About 6.8 million students take out need-based loans each year.
The College Cost Reduction Act includes a number of other provisions that would ease the financial burden imposed on students and families by the cost of college, including:
- Tuition assistance for excellent undergraduate students who agree to teach in the nation’s public schools;
- Loan forgiveness for college graduates that go into public service professions;
- Increased federal loan limits so that students won’t have to rely as heavily on costlier private loans; and
- New tuition cost containment strategies.
President Franklin Roosevelt signed the GI Bill into law in 1944. The original law enabled 7.8 million veterans of the second World War to participate in education or job training programs.
For a fact sheet on the legislation, click here.
To see who would benefit from the legislation, click here.
To see the full text of the legislation, click here.
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FOR IMMEDIATE RELEASE
Contact: Tom Kiley / Rachel Racusen
2181 Rayburn House Office Building
Washington, DC 20515
202-226-0853
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