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Contact: Gordon Smith Press Office
Phone: 202-224-3753 |
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Student Aid Boosted by $20 Billion
Smith provisions to increase Pell Grants, cut student loan rates included in bill |
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| Oregon students visit Senator Smith in his Capitol Hill office located in the Russell Buidling |
September 14th, 2007 - Washington, DC - The Senate approved last week the single largest investment in college financial aid since the GI Bill, including provisions championed by Oregon’s Sen. Gordon Smith to increase direct student aid. Senator Smith’s initiatives will increase Pell Grants to $4,550 next year and to $5,400 by 2012. The increase will help Oregon students who are already facing a 35% increase in tuition costs over the last five years to attend an Oregon public college.
“A college education must always be within reach,” Smith said. “There needs to be financial options for every student. This is a huge step toward lightening the burden of debt too often attached to a college education.”
Senator Smith has been working this year with Massachusetts Senator Ted Kennedy to increase educational opportunities for low-income students by upping the maximum Pell Grant award and cutting student loan rates. This legislation was included in the College Cost Reduction and Access Act, which will soon be sent to the President for his signature.
Under the new legislation, the maximum value of the Pell Grant scholarship will increase by $1,090 over the next five years. Currently in Oregon the maximum Pell Grant of $4,050 covers only 32% of the cost of college. Two decades ago a Pell Grant covered 53% of the cost. The bill also cuts interest rates over the next four years on need-based student loans in half, from 6.8 percent to 3.4 percent. Once phased in, this would save the average student $4,400 over the life of the loan.
The $20 billion increase in student aid will not raise taxes because it is paid for by reducing excessive federal subsidies paid to college loan lenders. The final bill also includes a provision, similar to legislation introduced three times by Senator Smith, which forgives student loans for recent graduates who work ten years or more in public service careers such as military members, nurses or early childhood educators.
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