College Cost Reduction Act Passes Congress with Bipartisan Majority
Washington , DC – Congresswoman Carol Shea-Porter (D-NH) voted today to approve a bill that will make college more affordable. The College Cost Reduction and Access Act (HR 2669) makes the single largest federal investment in college aid since the GI Bill – and it does so at no new taxpayer expense. The final version of the bill received broad bipartisan support, passing the House by 292 to 97 and the Senate 79 to 12. It will now go to the President, who is expected to sign it into law.
“ This is a great day for the middle class ,” said Congresswoman Shea-Porter. “ This bill will lower the cost of college by cutting student loan rates in half, increasing the value of Pell Grants, and providing incentives for students who go into public service professions. The 110th Congress has delivered on our promise to make college more affordable for every American .”
The College Cost Reduction and Access Act would boost college financial aid by more than $20 billion over the next five years and cuts interest rates on subsidized student loans in half over the next four years. The bill pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $20.9 billion. In addition, it includes $750 million in federal budget deficit reduction.
During the committee mark-up of the bill in June, Congresswoman Shea-Porter, along with Congressmen 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 of the amendment, the House voted to increase the maximum value of the Pell Grant scholarship by $500 over the next four years. In the final version of the bill, the Pell Grant scholarship will increase to a total of $5,400 by the year 2012.
Other provisions of the College Cost Reduction Act include:
- Reducing the cost of student loans by cutting interest rates in half on need-based loans from 6.8 percent to 3.4 percent over the next four years. This will save the typical student borrower a total of $4,400. Approximately 6.8 million students take out need-based loans each year;
- Making loan payments more manageable for students by guaranteeing that borrowers will never have to spend more than 15 percent of their yearly discretionary income on loan repayments and by allowing borrowers in economic hardship to have their loans forgiven after 25 years;
- Providing tuition assistance for excellent undergraduate students who agree to teach high-need subjects in high-need schools;
- Encouraging and rewarding public service by providing loan forgiveness for college graduates that go into public service professions, including: military officers, first responders, firefighters, nurses, law enforcement officers, prosecutors, early childhood educators, public defenders, and librarians.
President Franklin Roosevelt signed the GI Bill into law in 1944. The original law enabled 7.8 million veterans of the second World War to participate in education or job training programs.