College Cost Reduction Act is Enacted into Law: Making College More Affordable for Students
 

I am happy to announce that the President recently signed into law legislation that will make college more affordable and offer the single largest investment in college financial assistance since the 1944 GI Bill at no new cost to U.S. taxpayers. The College Cost reduction Act was signed into law last week.
This new law will boost college financial aid by more than $20 billion over the next five years and cut 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. It also includes $750 million in federal budget deficit reduction.

Families across New Jersey are sending their children to college and when they graduate, they should not be saddled with debt.  Under this new law, the maximum value of the Pell Grant scholarship will increase by $1,090 over the next five years, reaching $5,400 by 2012. Nearly 6 million low- and moderate-income students across the country will benefit from this increase.

To reduce the cost of loans for millions of student borrowers, this law cuts interest rates in half on need-based student loans, from 6.8 percent to 3.4 percent over the next four years. The rate cut will save the typical student borrower a total of $4,400. About 6.8 million students take out need-based loans each year.

In addition, this law will prevent students 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 25 years. 
I applaud the efforts of Congress and the President to get such an important piece of legislation enacted into law.
  

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