On July 11, 2007, the House passed the College Cost Reduction Act of 2007, H.R. 2669, which will provide the single largest increase in college aid since the GI bill in 1944. 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. This bill was signed into law on September 27, 2007.
No one should be denied the opportunity to go to college simply because of the price, yet unfortunately, that has been what many American families have been forced to do. Tuition at four-year public colleges has grown by 35 percent in the last five years. Students and families are taking on increasing amounts of debt, and each year nearly 200,000 students are holding off going to college, or skipping it altogether, because they cannot afford it.
This legislation invests about $18 billion dollars over the next five years in reducing college costs, helping millions of students and families. It comes at no new cost to taxpayers, and is funded by cutting excess subsidies paid by the federal government to lenders in the student loan industry.
This legislation will:
Strengthen the Middle Class by Making College More Affordable
- Cutting interest rates in half on subsidized student loans over the next five years.
- Making student loan payments more manageable for borrowers by guaranteeing that borrowers will not have to pay more than 15 percent of their discretionary income in loan repayments, and allowing borrowers to have their loans forgiven after 20 years.
- Increasing federal loan limits to provide borrowers with additional assistance in paying for college and to help them rely less on costlier private loans.
- Containing college costs.
Increase the Purchasing Power of the Pell Grant Scholarship
- Increasing the maximum Pell Grant scholarship by at least $500 over the next five years. When combined with other Pell scholarship increases passed or proposed by Congress this year, the maximum Pell Grant would reach $4,900 by 2008 and $5,200 by 2011, up from $4,050 in 2006, thus restoring the Pell's purchasing power.
- Expanding eligibility to include and serve more students with financial need.
Ensure a Highly Qualified Teacher in Every Classroom
- Providing upfront tuition assistance to qualified undergraduate students who commit to teaching in public schools in high-poverty communities or high-need subject areas.
Encourage and Reward Public Service
- Providing loan forgiveness for first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, early childhood educators, librarians and others.
- Revising policies to allow public servants to have their loans forgiven after 10 years.
Encourage Philanthropic Participation in College Retention and Financing
- Establishing a partnership with federal, state and local government entities and philanthropic organizations through matching challenge grants aimed at increasing the number of first generation and low-income college students.
Make Landmark New Investments in Historically Black Colleges and Universities, Hispanic-Serving Institutions, Tribally-Controlled Colleges and Universities, Alaska and Hawaiian Native Institutions, and Predominately Black Institutions
- Guaranteeing $500 million over five years.