On College Aid, Congress Fulfills its Promise
Democratic legislation provides greatest increase in student aid since the ‘GI Bill’ at no taxpayer expense; Savings to debt-burdened families could begin as early as October

Friday, September 7, 2007

WASHINGTON, DC -- Fulfilling a campaign promise, the House and Senate today approved legislation that will do more to help students and families pay for college than any federal effort since the 1944 GI Bill. The legislation, which comes at no new cost to U.S. taxpayers, was one of the Democrats' top six legislative priorities announced last fall before winning back control of the Congress.  Bush Administration officials told congressional leaders yesterday that the president will sign the measure into law, meaning that relief to debt-burdened families could begin as early as next month.

Despite objections from top Republican leaders in the House, the measure won overwhelming approval in both the House and Senate.  The House approved the bill 292 to 97, while the Senate voted 79 to 12 to approve the bill.

“Today is truly a historic day for students, families, and the future of our country,” said Congressman George Miller (D-CA), chairman of the Education and Labor Committee and author of the legislation.

“This legislation delivers urgently needed financial relief to qualified students and families who are working very hard to pay for college, to help our economy, and to keep America at the forefront of innovation and discovery,” Miller said.  “I urge people to pay attention to what we have accomplished here.  The fact is, when Democrats asked voters last November to elect a Democratic majority in the House and the Senate, we promised that this legislation would be one of our six top priorities.  We made that promise in good faith.  And now we have done it.  Elections make a difference, make no mistake about it.”

The legislation, the College Cost Reduction and Access Act (H.R. 2669), will boost college financial aid by roughly $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.

Under the legislation, the maximum value of the Pell Grant scholarship will increase by $1,090 over the next five years, reaching $5,400 by 2012, up from $4,050 in 2006 – thus restoring the purchasing power of the Pell Grant scholarship. Some students will see an immediate boost of almost $500 in their Pell Grant scholarship in the 2008-2009 school year alone. Roughly 5.5 million low- and moderate-income students would benefit from this increase.

The bill will also cut interest rates in half on need-based student loans, from 6.8 percent to 3.4 percent, over the next four years. Once fully phased-in, this will 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.

In addition, the College Cost Reduction and Access Act will ease the financial burdens college costs impose on students and families and expand college access for low-income and minority students by:

·        Making loan payments more manageable for students by guaranteeing that borrowers will never have to spend more than 15 percent of their yearly discretionary income on loan repayments and by allowing borrowers in economic hardship to have their loans forgiven after 25 years;

·        Providing tuition assistance for excellent undergraduate students who agree to teach in high-need subjects in high-need schools;

·        Making a landmark new investment in minority serving institutions, including Historically Black Colleges and Universities and Hispanic Serving Institutions, for critical support services that help recruit and retain students; and

·        Encouraging and rewarding public service by providing loan forgiveness for college graduates that go into public service professions, such as military officers, first responders, firefighters, nurses, law enforcement officers, prosecutors, early childhood educators, public defenders, librarians, and others.

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.

Making college more affordable and accessible has been a top priority of the Democratic Congress. Already this year the Congress has approved legislation to lower college costs and clean up the corruption in the federal student loan programs. Later this year the Education and Labor Committee also plans to move forward with separate legislation to strengthen and reauthorize the Higher Education Act.

For a fact sheet on the College Cost Reduction and Access Act, click here.

To see who benefits from 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