WASHINGTON, D.C. – Legislation that will make college dramatically more affordable for millions of Americans, at no new cost to taxpayers, overwhelming passed the U.S. House of Representatives today.
The Student Aid and Fiscal Responsibility Act (H.R. 3221), which was approved by a bipartisan vote of 253 to 171, will move the U.S. closer to reaching President Obama’s goal of having the highest proportion of college graduates in the world by 2020.
It will generate almost $90 billion in savings over the next ten years that will be used to boost Pell Grant scholarships, keep interest rates on federal loans affordable, create a more reliable and effective financial aid system for families, and enact President Obama’s key education initiatives. The legislation represents the greatest investment in federal student aid in history, and is one of President Obama’s three top domestic policy priorities, along with energy and health care.
The Student Aid and Fiscal Responsibility Act (H.R. 3221), which was approved by a bipartisan vote of 253 to 171, will move the U.S. closer to reaching President Obama’s goal of having the highest proportion of college graduates in the world by 2020.
It will generate almost $90 billion in savings over the next ten years that will be used to boost Pell Grant scholarships, keep interest rates on federal loans affordable, create a more reliable and effective financial aid system for families, and enact President Obama’s key education initiatives. The legislation represents the greatest investment in federal student aid in history, and is one of President Obama’s three top domestic policy priorities, along with energy and health care.
“No student in America should have to mortgage their future to get a good education. This legislation provides students and families with the single largest investment in federal student aid ever and makes landmark investments to improve education for students of all ages – and all without costing taxpayers a dime,” said U.S. Rep. George Miller (D-CA), the chairman of the House Education and Labor Committee and the author of the bill. “Today the House made a clear choice to stop funneling vital taxpayer dollars through board rooms and start sending them directly to dorm rooms. This vote was a historic triumph for America’s students, families and taxpayers – and will ensure that their interests never again take a backseat to lenders and big banks.”
“I am proud to support H.R. 3221, a bill that brings much needed relief to our students in a fiscally-responsible way. It represents an historic investment in our education system, from our youngest students to our adult learners,” said U.S. Rep. Rubén Hinojosa (D-TX), chairman of the Subcommittee on Higher Education, Lifelong Learning, and Competitiveness. “I am especially proud that this bill strengthens our nation’s Minority-Serving Institutions, particularly in the STEM areas, so that students can stay in school, graduate and succeed in our global economy. It does this by investing $2.55 billion dollars in our nation’s Minority-Serving Institutions over a ten year period. We estimate that this funding will reach at least 500 institutions of higher learning. These investments will create a new generation of workers in STEM fields—professionals that our country desperately needs to remain competitive in the world.”
Similar to what President Obama proposed in his FY 2010 budget, H.R. 3221 will originate all new federal student loans through the Direct Loan program starting in 2010, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to affordable college loans, at the same low interest rates, terms and conditions, no matter what happens in the economy.
The legislation will ensure that all federal student loan borrowers receive the best possible customer service when repaying their loans by forging a new public-private partnership that allows private lenders to compete for contracts to service loans. Additionally, it will ensure that non-profit lenders have the opportunity to continue servicing loans – preserving a role for lenders and maintaining jobs in communities throughout the country.
This simple change will generate $87 billion in savings over the next 10 years, according to estimates from the Congressional Budget Office. The legislation will invest those savings directly in students and families by:
In addition, the Student Aid and Fiscal Responsibility Act will direct $10 billion of these savings back to the U.S. Treasury to help cut entitlement spending.
It will invest over $4 billion for school modernization, renovation and repair projects that will help improve school buildings across the country and help the nation transition to a clean energy economy.
And it will also invest $1 billion per year over eight years to help ensure that the next generation of children can enter kindergarten with the skills they need to succeed in school.
Building on proposals included in President Obama’s 2010 budget, the bill establishes the Early Learning Challenge Fund, a competitive grant program that challenges states to build a comprehensive, high-quality early learning system for children from birth through age five.
To view a summary of the legislation, click here.
For more details on:
A diverse coalition of organizations, including student groups, early education advocates, and business organizations, support the Student Aid and Fiscal Responsibility Act. To view their letters of support, click here. To view a statement by President Obama in support of the bill, click here.
To view a myth-fact sheet on this bill, click here.
“I am proud to support H.R. 3221, a bill that brings much needed relief to our students in a fiscally-responsible way. It represents an historic investment in our education system, from our youngest students to our adult learners,” said U.S. Rep. Rubén Hinojosa (D-TX), chairman of the Subcommittee on Higher Education, Lifelong Learning, and Competitiveness. “I am especially proud that this bill strengthens our nation’s Minority-Serving Institutions, particularly in the STEM areas, so that students can stay in school, graduate and succeed in our global economy. It does this by investing $2.55 billion dollars in our nation’s Minority-Serving Institutions over a ten year period. We estimate that this funding will reach at least 500 institutions of higher learning. These investments will create a new generation of workers in STEM fields—professionals that our country desperately needs to remain competitive in the world.”
Similar to what President Obama proposed in his FY 2010 budget, H.R. 3221 will originate all new federal student loans through the Direct Loan program starting in 2010, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to affordable college loans, at the same low interest rates, terms and conditions, no matter what happens in the economy.
The legislation will ensure that all federal student loan borrowers receive the best possible customer service when repaying their loans by forging a new public-private partnership that allows private lenders to compete for contracts to service loans. Additionally, it will ensure that non-profit lenders have the opportunity to continue servicing loans – preserving a role for lenders and maintaining jobs in communities throughout the country.
This simple change will generate $87 billion in savings over the next 10 years, according to estimates from the Congressional Budget Office. The legislation will invest those savings directly in students and families by:
- Investing $40 billion to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $6,900 by 2019. Starting in 2010, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index plus 1 percentage point;
- Investing $3 billion to bolster college access and completion support programs for students;
- Strengthening the Perkins Loan program, a campus-based program that provides low-cost federal loans to students;
- Keeping interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012;
- Making it easier for families to apply for financial aid by simplifying the FAFSA form;
- Providing loan forgiveness for members of the military who are called up to duty in the middle of the academic year.
- Investing $2.55 billion in Historically Black Colleges and Universities and Minority-Serving Institutions to provide students with the support they need to stay in school and graduate; and
- Investing $10 billion to build a world-class community college system that prepares students and workers for the jobs of the future – and jobs in high demand by local employers – by incentivizing community colleges to partner with businesses, job training and adult education programs.
In addition, the Student Aid and Fiscal Responsibility Act will direct $10 billion of these savings back to the U.S. Treasury to help cut entitlement spending.
It will invest over $4 billion for school modernization, renovation and repair projects that will help improve school buildings across the country and help the nation transition to a clean energy economy.
And it will also invest $1 billion per year over eight years to help ensure that the next generation of children can enter kindergarten with the skills they need to succeed in school.
Building on proposals included in President Obama’s 2010 budget, the bill establishes the Early Learning Challenge Fund, a competitive grant program that challenges states to build a comprehensive, high-quality early learning system for children from birth through age five.
To view a summary of the legislation, click here.
For more details on:
- How this legislation will help students and families.
- For more details on converting to Direct Loans.
- For more details on how this bill will strengthen community colleges.
- For more details on investments in early education.
A diverse coalition of organizations, including student groups, early education advocates, and business organizations, support the Student Aid and Fiscal Responsibility Act. To view their letters of support, click here. To view a statement by President Obama in support of the bill, click here.
To view a myth-fact sheet on this bill, click here.
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