Who Benefits from the College Cost Reduction and Access Act?

• Low- and middle-income students and families
• Our workforce and our economy
• African-American students and families
• Hispanic students and families

…Low- and middle-income students and families.

• 5.5 million students who take out need-based federal student loans each year will see the interest rates on their loans halved by 2011, saving the typical borrower (with $13,800 in need-based loan debt) $4,400 over the life the loan, once fully implemented.
• Half of need-based federal student loan borrowers have family incomes between $26,000-68,000. ¹
• In 2003-2004, the median income of need-based federal loan borrowers was $45,000. By comparison, in 2004, the overall U.S. median family income was roughly $54,000. ²
• About 5.5 million students who receive Pell Grant scholarships each year saw an immediate increase of $490 in their maximum Pell scholarship, and will see a total increase of $1090 by the 2012-2013 school year.
• In FY 2006, more than five million students received a Pell Grant scholarship. Of these students, 74 percent had family incomes below $30,000.
• 2.3 million students who attend Historically Black Colleges and Universities, Hispanic-Serving Institutions, and other minority serving schools will benefit from a $510 million investment in their schools - funding critical support services that help recruit and retain students, About one third of all minority students who attend college in the United States are enrolled in minority serving institutions. ³

…Our workforce and our economy.

• Students who pursue careers as public school teachers will receive up-front tuition assistance of $4,000 per year, to a maximum of $16,000 – providing aid to at least 21,500 undergraduate and graduate students who commit to teaching a high-need subject in high-need schools for four years.
• On average starting salaries for teachers, 23% of public college and 38% of private college graduates have unmanageable student loan debt starting as a teacher. The average starting salary for a teacher in 2003-2004 was $31,704. ⁴
• Public servants will receive complete loan forgiveness after 10 years of service - providing help to men and women serving in the military, first responders, law enforcement officers, firefighters, nurses, public dfenders, prosecutors, early childhood educators and others.
• More than 80% of law students borrow to pay for their degree. In 2005, public defenders and prosecutors had median starting salaries of about $43,000 and $44,000, respectively.⁵

…African-American students and families.

• H.R. 2669 increased the maximum Pell Grant scholarship – the federal scholarship for low- and moderate-income students – by $490 immediately and will increase it by a total of at least $1,090 by the 2012-2013 school year. About 47 percent of all African-American students receive Pell Grant scholarships each year.
• H.R. 2669 will cut the interest rates on need-based federal student loans in half from 6.8 percent to 3.4 percent by 2011. Once fully implemented, this cut will save the typical borrower – with about $13,800 in need-based loan debt – $4,400 over the life of the loan. About 38 percent of African-American students take out need-based student loans each year.
• H.R. 2669 will provide $170 million in grants for Historically Black Colleges and Universities (HBCUs) over the next five years. HBCUs enroll 14 percent of all African-American students. All 99 HBCUs that currently receive federal funds will benefit from this significant funding increase.
• H.R. 2669 will create a new designation of Predominantly Black Institutions, which are defined as schools that enroll students in financial need and have at least 40 percent African-American student enrollment. These schools will be eligible to receive $30 million in grant aid over five years for programs in the fields of science, technology, engineering, health education, teacher education, and programs geared towards improving the educational outcomes of African-American males.
• H.R. 2669 will provide $228 million in funding over four years for Upward Bound, a program that seeks to increase high school completion and college participation and graduation rates among low-income students and first-generation college students. This will restore critical funding for programs that were not funded in fiscal year 2007.
• African American students make up nearly 50 percent of all Upward Bound participants.

…Hispanic students and families.

• H.R. 2669 increased the maximum Pell Grant scholarship – the federal scholarship for low- and moderate-income students – by $490 immediately and will increase it by a total of at least $1,090 by the 2012-2013 school year. About 37 percent of Hispanic students receive the Pell Grant scholarship each year.
  • About 25 percent of dependent Hispanic students have household incomes under $40,000 – compared to 16 percent of all undergraduates⁶
  • 25 percent of independent Hispanic students have household incomes under $20,000 – compared to 21 percent of all undergraduates (Institute for Higher Education Policy)⁶
  • Only 8 percent of Hispanic students have household incomes of $80,000 or more – compared to 16 percent of all undergraduates
  ⁶
• H.R. 2669 will cut the interest rates on need-based federal student loans in half from 6.8 percent to 3.4 percent by 2011. Once fully implemented, this cut will save the typical borrower – with about $13,800 in need-based loan debt – $4,400 over the life of the loan. About 25 percent of Hispanic students take out need-based student loans each year.
• H.R. 2669 will provide $200 million in grants over the next five years to Hispanic-Serving Institutions (HSIs). About 173 HSIs, which enroll almost half of all Hispanic college students, will be eligible to receive these grants. 2 Like other minority-serving institutions, HSIs are more likely to offer support services for Hispanic students, such as mentoring, tutoring and counseling programs, than are other institutions. Priority funding will be given to HSIs that increase the number of low-income students attaining degrees in the fields of science, technology, and math.
• H.R. 2669 will provide $228 million in funding over four years for Upward Bound, a program that seeks to increase high school completion and college participation and graduation rates among low-income students and first-generation college students. This wil restore critical funding for programs that were not funded in fiscal year 2007.
  • Hispanic students make up 22 percent of all Upward Bound participants.

¹ Congressional Research Service
² Economic Policy Institute
³ Institute for Higher Education Policy
⁴ State PIRGs’ Higher Education Project: “Paying Back, Not Giving Back,” April 2006
⁵ Equal Justice Works, “Financing the Future: Responding to the Rising Debt of Law Students,” January 2007
⁶ Institute for Higher Education Policy, “How Latinos Pay for College: Patterns of Financial Aid 2003-2004”