House Passes Bill to Reduce Cost of College

HOUSE PASSES BILL TO REDUCE COST OF COLLEGE

Washington, D.C.–U.S. Representative Jan Schakowsky (D-IL) voted for H.R. 2669, the College Cost Reduction Act, which passed the House today by a vote of 273 to 149. This bill will make the largest investment in higher education since the 1944 GI Bill. The Act will benefit students and families at no new cost to taxpayers by cutting excess subsidies paid by the federal government to lenders in the student loan industry.

"While college tuition skyrocketed, the Bush Administration and the Republican-controlled Congress did absolutely nothing to alleviate the enormous financial burden placed on students,... said U.S. Representative Jan Schakowsky. "This bill shows that the new Democratic-led Congress is committed to growing and strengthening America's middle class by making college more affordable and accessible for all students....

The College Reduction Act will:
• Increase the maximum Pell Grant by at least $500 over the next five years, increasing the maximum grants to $5,200 by 2010.
• Cut student loan interest rates in half over the next five years (from 3.5 to 5 percent).
• Increase federal loan limits to provide borrowers with additional assistance in paying for college and to help them rely less on costlier private loans.
• Guarantee that borrowers will not have to pay more than 15 percent of their discretionary income in loan repayments, and forgives loans after 20 years.
• Provide $5,000 in loan forgiveness for those serving the country in critical public service jobs, including first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, early childhood educators, and librarians.
• Invest $500 million in Historically Black Colleges and Universities, Hispanic Serving Institutions, Tribal Colleges and the Alaska/Hawaiian Native schools as well as the newly established Predominately Black Institutions and institutions serving Asian Americans and Pacific Islanders.
• Create TEACH grants that would provide up-front tuition assistance of $4,000 per year (for a maximum of $16,000) for high-achieving graduate and under-graduate students who commit to teaching a high-need subject in a high-need school for four years.

Under the Bush Administration, the maximum amount for Pell Grants remained virtually stagnant for five years. The maximum amount for a Pell Grant only increased $50 from 2002 to 2006. President Bush signed legislation that cut $12.7 billion from student loan programs-the largest single cut in history. The legislation imposed higher fees on students and increased interest rates on parent loans. The bill also put billions of dollars in student aid at risk by cutting all of the critical funds to carry out and administer the student aid program.