Committee Approves Largest Education Aid Package Since GI Bill
Washington, DC - Congresswoman Carol Shea-Porter (D-NH) secured an amendment to increase Pell Grants for college students as part of a new bill aimed at reducing the cost of higher education. The House Education and Labor Committee voted yesterday to pass the College Cost Reduction Act of 2007 (H.R. 2669), including Shea-Porter's amendment, by a vote of 30 to 16.
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.
"For many students, the cost of a college education has become painfully high. This amendment increases the availability of low-cost Pell Grants. Millions of students count on these grants to fund their college educations," 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," she added.
The amendment to the bill would 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. This move would bring the total Pell award to $5,200 by 2012, up from $4,050 in 2006, when combined with other Pell increases already passed or pending in Congress.
The bill also has positive implications for New Hampshire families, where an estimated 1,582 additional students will qualify for the Pell Grant over the next five years. Overall, students and families in the Granite State will receive more than $65 million in additional benefits as a result of the College Cost Reduction Act in the form of Pell Grants and student loans.
"Education is the key to success in our society. I am proud that by cutting wasteful lender subsidies we have been able to pass the largest investment in higher education that this country has made since the GI Bill sixty years ago," continued Shea-Porter. "The GI Bill created the foundation for the American middle class by allowing millions of veterans, including my father, to achieve their dreams and obtain a college education. At a time when college costs are skyrocketing, this bill will help enable a new generation of students to get the education they will need to succeed in the economy of tomorrow."
In addition to the Pell Grant increases, the legislation would 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.
Shea-Porter introduced her amendment to increase Pell Grant funding during the Education and Labor Committee mark-up of the bill on Wednesday, along with fellow committee members, Representatives Joe Courtney (D-CT) and Danny Davis (D-IL).
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. The original bill called for the scholarship increase to take place over a five-year 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.