WASHINGTON –The U.S. House of Representatives passed legislation that would invest $18 billion in college financial aid, the single largest investment in college financial aid since the 1944 GI Bill. Congressman Bart Stupak (D-Menominee) voted for the legislation, the College Cost Reduction Act of 2007, saying the bill would help millions of Americans afford college and higher education.

 

“A solid education is absolutely vital to succeed in today’s economy, but each year the cost of a higher education keeps rising,” Stupak said. “This legislation would help make college education more affordable for middle class families.”

 

Under the legislation, the maximum value of the Pell Grant scholarship would increase by $500 over the next five years. When combined with other Pell Grant scholarship increases passed by the House, the maximum Pell Grant would reach $4,900 in 2008 and $5,200 in 2011. This would be an increase from the $4,050 that was the maximum for Pell Grants in 2006. About 6 million low and moderate-income students across America would benefit from this increase.  

 

“Pell Grants make a big difference for families that are struggling to afford college costs,” Stupak said. “200,000 students in Michigan would benefit from a $500 increase in the Pell Grant.” 

 

The legislation would also 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 interest rate cut would save the typical student borrower $4,400. About 6.8 million students across the country, including 143,000 Michigan students, take out student loans each year. 

 

The bill would also authorize tuition assistance for undergraduate students who agree to teach in the nation’s public schools. Yet other provisions in the measure authorize loan forgiveness for college graduates that go into public service professions like law enforcement. 

 

“This bill will provide loan forgiveness for early childhood educators, first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, librarians and others that choose professions that give back to their communities,” Stupak said.

 

The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan program by $19 billion. The bill also includes nearly $1 billion in federal budget deficit reduction.   The Senate is expected to vote on similar legislation this month.

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