WASHINGTON, D.C. –Today Congresswoman Lois Capps (D-CA) celebrated a historic investment in college aid as the House passed the College Cost Reduction Act of 2007 (H.R. 2669) by a vote of 273 to149.  The legislation implements the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college – and doing so at no new cost to U.S. taxpayers.  The legislation would increase college financial aid by about $18 billion over the next five years. The legislation pays for itself by reducing excessive federal subsidies given to lenders in the college loan industry by $19 billion. The Senate is expected to vote on similar legislation this month.

 “I’m proud to have cast my vote for this historic investment in our students and ultimately our country’s future,” said Capps.  “By increasing Pell Grants and reducing student loans rates we’ll help relieve some of the burdens of the growing cost of higher education as well as the daunting debt facing graduates today.  I’m also pleased that this bill will encourage and reward those who pursue careers in teaching, nursing, firefighting and law enforcement.  By including $5,000 in loan forgiveness for those who pursue careers in public service, we are making an important long term investment in our community.  Our legislation also ensures greater access to the benefits of higher education by providing additional funding to Upward Bound, a successful outreach program designed to support students from disadvantaged backgrounds.  This record increase in student aid will open doors of opportunity for a better life for all our students and ensure that America remain competitive in the global economy.”

 The College Cost Reduction Act of 2007 takes several steps to help students and their families meet rapidly increasing higher education costs.  The bill would increase the maximum value of the Pell Grant scholarship by $500 over the next five years, raising the maximum Pell grant to $5,200 in 2011.  In California over 600,000 low- and moderate-income students would benefit from this increase.

 The bill would also cut interest rates in half on need-based student loans, significantly reducing the cost of those loans for millions of student borrowers. By cutting the interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years, the average student in California would save over $4,800 over the course of their loan. 

 The legislation would also prevent student borrowers from facing unmanageable levels of federal student debt 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 20 years.  

 Finally, the bill would support students who pursue careers in public service by offering tuition assistance for excellent undergraduate students who agree to teach in the nation’s public schools and up to $5,000 in loan forgiveness for college graduates that go into public service professions.

A broad coalition of student advocacy groups and labor organizations support the College Cost Reduction Act.

A copy of Congresswoman Capps’ floor speech follows: 

Statement of Rep. Lois Capps

HR 2669 – College Cost Reduction Act of 2007

July 11, 2007

 Madam Speaker, I rise today is strong support of the College Cost Reduction Act.

 For far too long, we’ve watched as Pell Grants have stayed flat, and tuition has continued to sore – over 40% percent in the last 6 years alone. Students today are graduating with greater and greater debt.  As a result, they are increasingly unwilling to take critical public sector jobs such as first responders, law enforcement officials, nurses, and teachers because they offer modest salaries.  For example, nearly 32% of graduates pursuing teaching careers can’t afford to repay their student loans on a starting teacher’s salary.  

 By passing the College Cost Reduction Act, we are encouraging and rewarding public service by providing $5,000 in loan forgiveness to graduates that take public service jobs.  Madame Speaker, this is an excellent provision that makes an important investment in our communities.  And its just one of the many reasons I will be supporting this legislation today.

 I urge all of my colleagues to support the College Cost Reduction Act.

I yield back.

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Pictured above: (center) Congresswoman Capps meets with Central Coast firefighters to discuss emergency preparedness.