Boost the Pell Grant scholarship to its highest amount ever

• Increase the maximum Pell Grant Award by $500 to $5,350 for 2009-2010 and to $5,550 for 2010-2011. When combined with other increases enacted during the 110th Congress, the maximum Pell Grant award will have increased by $1,500 – or 37 percent – since January 2007. 

Reduce Students’ Dependence on Costlier Private Loans

• Increase annual loan limits on federal Stafford loans for undergraduate students by $2,000, and the aggregate total by $8,000.
• Unlike private student loans, which have become less available in the current economic crisis, federal student loans carry low, fixed interest rates and remain readily available for all eligible students. The increase in loan limits will ensure that students can continue to take advantage of less expensive borrowing options before turning to riskier private loans. 
  

Expand Work Study and Service Opportunities for Students

• Provide $490 million for work-study programs to create opportunities for an additional 200,000 students to get paid for work in a field related to either their major or community service.

 
Stabilize State Budgets for Higher Education

• Provide funding for postsecondary education through the State Fiscal Stabilization Fund which will allow states to, among other options, retain or hire faculty and staff, maintain or expand enrollment, and pay for other costs associated with the evolving needs of higher education in the current economy

Modernize Campuses and Improve Student Quality of Life

• Provide $6 billion to repair, renovate and modernize campus facilities used for instruction, research and student housing that are in need of improvement.

Support for the American Recovery and Reinvestment Act…

“Not only will these provisions provide a near-term benefit of sustaining and creating jobs, as in the case of the infrastructure provisions, or relieving stress on family finances and creating an alternative to unemployment, as in the case of Pell Grants, but they represent a solid investment in the future prosperity of our country as well.”
-- Molly Corbett Broad, President, American Council on Education

“Increases in student financial aid, added investments in science and research, and support for infrastructure repair and modernization will undoubtedly help our universities play a key role in bolstering the nation’s economy.”
-- Peter McPherson, President, National Association of State Universities and Land-Grant Colleges

"With college costs still rising and families facing growing uncertainty in today's economy, federal student aid is more important than ever," Chairman George Miller said.  "Over the past two years, the Democratic Congress has made college affordability a top priority -- providing historic investments in federal student aid and safeguarding federal student loans from the turbulence in the nation's financial markets. This study reinforces that these efforts are critically needed to help make college more affordable and accessible for students and their families.

"This report also shows that the Pell Grant scholarship -- which Congress has significantly boosted in the past two years --  is playing an increasingly important role in expanding college access, especially for low- and middle-income students. As we work to get our economy back on the road to recovery, it is vital to make sure that students are aware of all their student aid options and are fully maximizing their federal student loans before turning to more expensive private loans."

According to the report, the number of students receiving almost all federal grants and loans have increased over the last ten years and the number of students receiving Pell Grant scholarships has increased from 3.7 million in 1997-98 to 5.4 million in 2007-2008.

Last year, Congress enacted the College Cost Reduction and Access Act, which provides the largest increase in student financial aid since the GI bill. The law increases the maximum Pell Grant scholarship by more than $1,000, cuts interest rates on need-based student loans in half, creates income based repayment programs for students graduating with college debt and gives loan forgiveness incentive programs for public service workers.

Congress also recently enacted the Ensuring Continued Access to Student Loans Act to ensure that students and families can continue to have access to all the federal college loans they are eligible for.

In August, Congress enacted the Higher Education Opportunity Act, the first reauthorization of the nation's primary higher education laws in a decade. The law addresses rising college tuition prices, makes textbook costs more manageable, simplifies the federal student aid application process, makes the Pell Grant scholarship available year-round for the first time, provides new consumer protections for federal and private student loan borrowers, and much more.

The House overwhelmingly passed the bill, H.R. 6889, by a vote of 368 to 4. Specifically, the legislation would extend provisions that provide the U.S. Secretary of Education with the additional tools needed to safeguard federal student loans by purchasing loans from lenders in the federal student loan programs in the event that those lenders were unable to access the capital needed to finance their lending activity. Like the original legislation, this bill carries no new cost for taxpayers.

H.R. 6889 would extend, for one year:

• The temporary authority given to the U.S. Education Secretary to purchase loans from lenders in the federally guaranteed loan program, ensuring that lenders continue to have access to capital to originate new loans, if there was a determination that lenders were unable to meet demand for loans. The Education Department would be authorized to purchase loans only if doing so would not result in a net cost for the federal government; and
• The authority to allow guaranty agencies to carry out the functions of lenders of last resort on a school-wide basis. Under existing law, these guaranty agencies are obligated to serve as lenders of last resort to prevent any possible problem in access to student loans.

Last spring, Congress first passed the Ensuring Continued Access to Student Loans Act of 2008, after turmoil in the nation’s credit markets made it difficult for some lenders that participate in the federally guaranteed student loan program to secure the capital needed to finance their student lending activity.

“At a time when our rough economy is already dealing a huge blow to American families, we can’t allow trouble in the credit markets to further price students out of a college degree.  With market turbulence showing no signs of letting up, it’s only prudent to make sure that students have every assurance that the federal student loans they need will be there next year.” -- Chairman George Miller

“Come spring, students and families will be making their plans for the next academic year.   It is critical that we extend the authority for the Secretary to purchase student loans to avoid any uncertainty about the access to this critical source of student financial aid.  “It would be a tragedy for a student to decide to forgo or postpone college because of a fear of not being able to get a federal student loan.” -- Rep. Rubén Hinojosa, Chairman of the Subcommittee on Higher Education, Lifelong Learning and Competitiveness
 

Today is truly a momentous day for America’s current and future college students and families. Over the past two years, the Democratic Congress has charted a new direction to help make college more affordable and accessible for all qualified students. We’ve enacted the single largest increase in federal student aid since the GI Bill and key measures to protect federal college aid from turbulence in the nation’s credit markets – and all without costing taxpayers a dime. We’ve proven we can work in a bipartisan way to enact good public policies that make sense for students, for our economy, and for taxpayers.

Now, with this bill signed into law, we have taken the next critical steps toward restoring the promise of our nation’s higher education programs: To help all students gain access to a world-class college education. For the first time in years, students and parents will encounter a higher education system that is more consumer-friendly and that operates in the best interests of helping them pay for college. This law will help every student in this country get their fair shot at a college degree, and reclaim their piece of the American Dream.

Tuition and fees have increased across the board over the last five years, at public and private colleges and at two-year and four-year colleges. These increases have consistently outpaced increases in the rate of inflation and in families’ ability to pay, creating a college cost crisis that threatens to prevent qualified students from pursuing a higher education.   This measure addresses these affordability challenges by encouraging colleges to rein in price increases, ensuring that states maintain their commitments to higher education funding, and providing students and families with consumer-friendly information on college pricing and the factors driving tuition increases.  It also strengthens provisions previously approved by the House to avoid conflicts of interest in the student loan programs. The bill’s new provisions include requiring better consumer disclosures and protections on private student loans.
 
In addition, the Higher Education Opportunity Act would:

• Streamline the federal student financial aid application process;
• Make textbook costs more manageable for students by, among other things, helping them plan for textbook expenses in advance of each semester; 
• Allow students to receive year-round Pell Grant scholarships; 
• Strengthen college readiness programs; 
• Increase college aid and support programs for veterans and military families; 
• Improve safety on college campuses and help schools recover and rebuild after a disaster; 
• Ensure equal college opportunities and fair learning environments for students with disabilities; and 
• Strengthen our nation’s workforce and economic competitiveness by boosting science, technology, and foreign language educational opportunities.
  

“Today’s students face daunting obstacles on the path to college, from skyrocketing tuition prices to predatory student lending tactics. This landmark bipartisan legislation will address these challenges and create a higher education system that is more consumer-friendly, fairer, and easier-to-navigate.  Already, this Congress has taken historic steps to make college more affordable and accessible. With today’s vote, we are saying that in our nation’s higher education programs, the needs of students and families must always come first.” -- Chairman George Miller

“This bill is crucial to the health of our economy and will ensure that more students graduate prepared for the 21st century workplace.  It puts smart strategies in place to improve our student aid process, restore confidence in our student loan programs, and provide more low-income, first-generation, and minority students the chance to pursue a college education.” -- Rep. Rubén Hinojosa, Chairman of the Subcommittee on Higher Education, Lifelong Learning, and Competitiveness



 

The law provides $170 million in new funding for HBCUs over the next two years to help expand college access, strengthen support services that focus on helping low-income and minority students stay in school and graduate, and renovate campuses in need of improvement. The grants provided under the law are mandatory funding, meaning schools will receive them in addition to any funding that is appropriated annually by the Congress. All 99 HBCUs that currently receive federal funds will benefit from this increase.

HBCUs play a significant role in helping African American students succeed in college and the workforce. Although they represent only 3 percent of all colleges and universities, they enroll close to a third of all African-American students. Forty percent of their students pursue four-year degrees in science, technology, engineering and math, and about half of all African-American students in teaching fields attend HBCUs.   Despite this progress, HBCUs continue to face a unique set of financial challenges, including balancing limited resources and endowments with a deep commitment to serving students with fewer financial resources. Many schools are in dire need of repair, especially Gulf Coast schools that are still feeling the devastating effects of Hurricanes Katrina and Rita.  Sadly, federal support for HBCUs and other minority-serving schools has dwindled under the Bush administration. In his most recent budget for the fiscal year 2009, President Bush proposed cutting funding for HBCUs and other minority-serving institutions by $85 million, a 35 percent decrease from the previous year’s budget.

In addition to the funding provided by the College Cost Reduction and Access Act, Democrats are also working to boost support for HBCUs by enacting the Higher Education Opportunity Act, which would strengthen and reauthorize the nation’s higher education programs. That bill, which Congress is working to finalize this week, would increase the amount of funding HBCUs could receive for capital projects, expand funding eligibility for graduate student programs at HBCUs and other minority serving-institutions and would address the challenges of starting and growing endowments at these schools.

“This landmark investment in HBCUs will strengthen college opportunities for millions of talented students.  HBCUs are a vital part of America’s higher education and economic framework, and have a long history of producing some of our nation’s greatest leaders, innovators, and thinkers. By providing HBCUs with these much-needed federal resources, we are saying that the needs of these vital institutions and their students can no longer go ignored.”  -- Chairman George Miller, author of the law

“HBCUs have played and continue to play an integral role in furthering the education of Black students in America.  Unfortunately, these institutions face increasing challenges and have limited resources.  I am very pleased with the historical investment to HBCUs that the College Cost Reduction and Access Act will provide. It is a much-needed step in the right direction and will go a long way toward helping HBCUs continue to provide a quality education to our nation's youth.” -- Rep. Robert C. “Bobby” Scott, Co-Chair of the Congressional Black Caucus Education Taskforce

“As a graduate of the University of Arkansas Pine Bluff, I and my brothers, sisters, nephews, cousins and friends know firsthand the opportunities provided by HBCUs, especially to low-income African American students.  Chairman George Miller and the Committee on Education and Labor are to be commended for this outstanding bill.” -- Rep. Danny K. Davis, Co-Chair of the Congressional Black Caucus Education Taskforce

This would be the first time the Higher Education Act was reauthorized since 1998. The current law expired in 2003. This Congress has already passed two major pieces of legislation to make college more affordable and accessible. Last September, Congress enacted the College Cost Reduction and Access Act, which provides more than $20 billion in federal college aid for students over five years – and at no new cost to taxpayers. This spring, Congress also enacted the Ensuring Continued Access to Student Loans Act, which safeguards students’ access to federal financial aid from turmoil in the U.S. credit markets. That law also carried no cost for taxpayers.

A college education continues to be the best path to the middle class. But more and more, high college prices and other obstacles are putting a college degree further out of reach for America’s students. In addition to rising tuition, students and their families face an overly complex federal student aid application process and a student loan industry mired in conflicts of interest and corrupt lending practices. The Higher Education Opportunity Act will continue this Congress’ effort to make college more affordable and accessible. This bill would reform our higher education system so that it operates in the best interests of students and families, while boosting our competitiveness and strengthening our future.