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For Immediate Release
July 11, 2007
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House Passes Single Largest Investment In
College Aid since GI Bill
Bill Would Boost Scholarships and Reduce Loan Costs at No New Taxpayer Expense, Helping Michigan Families Afford Higher Education |
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(Washington D.C.)- Rep. Sander Levin today voted for legislation that would make the largest investment in college financial aid since the 1944 GI Bill. This bill helps millions of Americans pay for college, at no cost to taxpayers.
This legislation, the College Cost Reduction act of 2007 (H.R. 2669), which the House passed by a vote of 273 to 149, would boost college financial aid by about $18 billion over the next five years. This provides nearly $513 million over 5 years in loans and grant aid for Michigan students and families. The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $19 billion. It also includes nearly $1 billion in federal budget deficit reduction. The Senate is expected to vote on similar legislation this month.
“Two thirds of the new jobs created in the next decade will require a college degree,” said Rep. Levin. “Improving access to higher education is vital to expanding opportunity for Michigan students and building Michigan’s economic future. This has to be an ongoing priority for the federal government and this legislation is an important step in the right direction.”
Under the legislation, the maximum value of the Pell Grant scholarship would increase by $500 over the next five years, from $4,050 to $5,200. This would benefit over 200,000 Michigan students headed to college by 2011, by raising the purchasing power of the Pell Grant. About 6 million low- and moderate-income students nationwide would benefit from this increase.
The legislation would cut interest rates in half on need-based student loans, reducing the cost of those loans for millions of student borrowers. Like legislation passed by the House earlier this year, the College Cost Reduction Act would cut interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years. Once fully phased-in, this would save the typical Michigan student borrower—nearly 150,000 students, borrowing on average $13,256—just over $ 4,200 over the life of the loan.
The College Cost Reduction Act includes a number of other provisions that would ease the financial burden imposed on students and families by the cost of college, including:
o Tuition assistance for excellent undergraduate students who agree to teach in the nation’s public schools;
o Loan forgiveness for college graduates that go into public service professions;
o Increased federal loan limits so that students won’t have to rely as heavily on costlier private loans;
o New tuition cost containment strategies; and
o Landmark investments in Historically Black Colleges and Universities, Hispanic Serving Institutions and minority serving institutions.
o Debt relief and loan forgiveness for borrowers in economic hardship.
President Franklin Roosevelt signed the GI Bill into law in 1944. The original law enabled 7.8 million veterans of the Second World War to participate in education or job training programs.
H.R. 2669 has been endorsed by a coalition of labor, student, and University groups, including the United States Student Assocation, the National Association of Independent Colleges and Universities, and the American Association of Community Colleges.
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