Bill Includes Shea-Porter's Amendment to Increase Pell Grants
Washington, DC - Congresswoman Carol Shea-Porter (D-NH) today applauded the passage of a bill aimed at expanding access to higher education. The House passed the College Cost Reduction Act, which included language offered by Congresswoman Shea-Porter to increase funding for the Pell Grant program, by a bipartisan vote of 273 - 149.
The legislation marks the single largest investment in college financial aid since the GI Bill - and does so at no new taxpayer expense. It pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $19 billion.
"The new Congress is keeping its promise to help lower and middle income families pay for higher education," said Congresswoman Shea-Porter. "Not only will this bill increase the funding for Pell Grants to allow more students to attend college, it does so without any additional cost to taxpayers."
During the committee mark-up of the bill, Shea-Porter, along with Representatives Joe Courtney (D-CT) and Danny Davis (D-IL), introduced an amendment to increase funding for the Pell Grant program by approximately $860 million. As a result, the maximum value of the Pell Grant scholarship would increase by $500 over the next four years - a full year sooner than timeline put forward in the original bill. This will bring the total Pell award to $5,200 by 2011, up from $4,050 in 2006, when combined with other Pell increases already passed or pending in Congress.
The passage of this legislation also has positive implications for New Hampshire families, where more than 15,000 students will benefit from the Pell Grant increase. Thanks to provisions that expand eligibility, approximately 1,500 additional students in New Hampshire will qualify for the grant program over the next five years. In total, students and families in the Granite State will receive more than $59 million in additional benefits as a result of the College Cost Reduction Act in the form of Pell Grants and student loans.
In addition to the Pell Grant increases, the legislation will cut interest rates in half on need-based student loans, reducing the cost of those loans for millions of students and their families. The House passed similar provisions earlier this year to cut interest rates from 6.8 percent to 3.4 percent over the next five years. Once phased-in, this would save a typical student borrower $4,400 over the life of a loan.
The College Cost Reduction Act also includes a number of other provisions that would help ease the financial burden imposed on families by rising education costs, including:
· Tuition assistance for excellent undergraduate students who agree to teach in the nation's public schools;
· Loan forgiveness for college graduates that go into public service professions;
· Increased federal loan limits so that students won't have to rely as heavily on costlier private loans; and
· New tuition cost containment strategies.
Additional Background on the College Cost Reduction Act of 2007 (H.R. 2669)
Increase the Purchasing Power of the Pell Grant Scholarship
· The Courtney, Shea-Porter, Davis Amendment increases the maximum Pell Grant scholarship by at least $500 over the next four years, ultimately reaching a maximum scholarship of at least $5,200 - a full year earlier than the original timetable.
· Expanding eligibility to include and serve over 600,000 new college students.
Strengthen the Middle Class by Making College More Affordable
· Cutting interest rates in half on subsidized student loans over the next five years.
· Making student loan payments more manageable for borrowers by guaranteeing that borrowers will not have to pay more than 15 percent of their discretionary income in loan repayments, and allowing borrowers in economic hardship to have their loans forgiven after 20 years.
· Increasing federal loan limits to provide borrowers with additional assistance in paying for college and to help them rely less on costlier private loans.
· Containing college costs.
Ensure a Highly Qualified Teacher in Every Classroom
· Providing upfront tuition assistance to qualified undergraduate students who commit to teaching in public schools in high-poverty communities or high-need subject areas.
Encourage and Reward Public Service
· Providing loan forgiveness for first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, early childhood educators, librarians and others.
· Revising policies to allow public servants to have their loans forgiven after 10 years.
Encourage Philanthropic Participation in College Retention and Financing
· Establishing a partnership with federal, state and local government entities and philanthropic organizations through matching challenge grants aimed at increasing the number of first generation and low-income college students.