College Cost Reduction and Access Act
On September 7, 2007, the House passed the final House-Senate agreement on the College Cost Reduction and Access Act, H.R. 2669, which will make the largest single investment in college financial aid since the GI Bill of 1944. On September 18, Speaker Pelosi signed this legislation and sent it to the President, and on September 27 the President signed this bill into law.
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The College Cost Reduction and Access Act will help millions of students and families pay for college at no new cost to taxpayers, boosting college aid by roughly $20 billion over the next five years. The Democratic-led Congress is committed to growing and strengthening America’s middle class, and will ensure that college is affordable for every qualified student who wants to attend. This legislation both expands educational opportunities for our nation’s young people, and is an investment in our workforce that will continue our economic leadership in the world.
Under the legislation, the maximum value of the Pell Grant scholarship will increase by $1,090 over the next five years, reaching $5,400 by 2012, up from $4,050 in 2006, thus restoring the Pell’s purchasing power. Some students will see an immediate boost of almost $500 in their Pell Grant scholarship in the 2008-2009 school year alone. Roughly 5.5 million low- and moderate-income students will benefit from this increase.
The legislation will also cut interest rates on need-based student loans in half, from 6.8 percent to 3.4 percent, over the next four years. Once fully phased-in, this will save the typical student borrower – with $13,800 in need-based student loan debt – $4,400 over the life of the loan. About 6.8 million students take out need-based loans each year.
The College Cost Reduction and Access Act will also ease the financial burdens college costs impose on students and families and expand college access for low-income and minority students by:
- Making loan payments more manageable for students;
- Providing tuition assistance for excellent undergraduate students who agree to teach in high-need subjects in high-need schools;
- Making a landmark new investment in minority serving institutions, including Historically Black Colleges and Universities and Hispanic Serving Institutions, for critical support services that help recruit and retain students;
- Encouraging and rewarding public service by providing loan forgiveness for college graduates that go into public service professions, such as military officers, first responders, firefighters, nurses, law enforcement officers, prosecutors, early childhood educators, public defenders, librarians, and others; and
- Developing new strategies to help colleges contain costs and making online information on college costs for students and parents more user friendly.
Fact sheet on the College Cost Reduction and Access Act>>
Learn who will benefit from this legislation>>
Read the full text of the legislation>>