Washington, D.C.--Congressman Eliot Engel voted Thursday to make the single largest educational investment in our history to help students pay for college. The Student Aid and Fiscal Responsibility Act (SAFRA) (H.R. 3221) will expand access to an affordable college education to more American students, transform early education opportunities, and build a world-class community college system at no added expense to the American taxpayer. The measure passed the full House on Thursday by a vote of 253-171.

“As a former educator, I am well aware that education is the key to a prosperous future. Our national economy is linked directly to the training of our workforce, and this achieved through education. We must ensure our youth have the opportunity to attend college and receive this vital training so the American workforce will be the most highly-skilled in the world,” said Rep. Engel. In 2008, students in New York borrowed 520,244 subsidized student loans.

This bill is a major step forward in President Obama’s initiative to make sure America again leads the world in college graduates by 2020. SAFRA will reform the federal student loan system to save taxpayers $87 billion, and direct $10 billion back to the Treasury to reduce deficit spending. SAFRA will change the way the student loan system functions by originating new loans through the government’s Direct Loan program. It will also maintain competition among private lenders and non-profits to provide top-notch customer service for student borrowers. This simple change will make college loans more reliable for students and families -- and ensure that loans operate in the best interests of borrowers by reducing many potential conflicts of interest which exist in the current loan system.

With the largest-ever investment in higher education, this bill will also significantly increase government grant and loan assistance for college tuition payments. Pell Grants, already distributed to more than 7 million students, will increase to $6,900 by 2019 from $5,350 today. SAFRA also keeps interest rates low on government-subsidized loans, makes substantial investments in early childhood education, expands the Perkins low-cost loan program to every U.S. college, and simplifies the process of applying for student financial aid.

Rep. Engel added, “The Bronx, Rockland and Westchester are home to many outstanding colleges, especially some of the finest community colleges in the state. This legislation will help them continue to grow and provide students from around the district with a quality education for many years to come.”

The effects of the legislation on District 17 are as follows:

• Invests $108.9 million of the $2.6 billion for Pell Grants New York is due to receive over the next 10 years. This increases the maximum annual Pell Grant scholarship to $5,550 in 2010 and $6,900 by 2019.
• 20,857 students will be eligible for a Pell Grant award in the 2010-2011 academic years.

New York will also receive as a result of SAFRA:

• Nearly $135.5 million to help finance projects to community college facilities. In 2007, over 270,000 students were enrolled in New York community colleges.
• More than $333.1 million over the next two years to give every child with access to a world-class learning environment by providing school districts with funds for school modernization, renovation, and repair projects.
• Increased funding for the College Access Challenge Grant program, resulting in at least $ 8.9 million a year for the next five years in New York.