As students across the country return to school, Congress has been hard at work making college more affordable and accessible. After years of neglect and inaction, we have made progress for college students and their families.
Cut Interest Rates on Student Loans in Half Over Four Years
With today's economy squeezing families and tuition prices continuing to soar, the high cost of college remains a top concern for Americans. However, there is some good news: New financial aid benefits enacted last year have begun to kick in.
Thanks to the College Cost Reduction and Access Act, enacted in September 2007, interest rates on need-based (subsidized) federal student loans dropped from 6.8 percent to 6.0 percent this summer - making these loans more affordable for millions of low- and middle-income students. This is the first of step towards halving these interest rates - over the next few years these rates will continue to decrease until they reach 3.4 percent.
Instituted Loan Forgiveness for Public Service
With the College Cost Reduction and Access Act, the Democratic-led Congress is encouraging and rewarding public service by providing loan forgiveness for college graduates who go into public service professions. These include military officers, first responders, firefighters, nurses, law enforcement officers, prosecutors, early childhood educators, public defenders, and librarians.
Increased Maximum Pell Grant by $1,090 Over Five Years
Under the College Cost Reduction and Access Act, the maximum value of the Pell Grant scholarship increases by $1,090 over the next five years, reaching $5,400 by 2012, up from $4,050 in 2006. 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.
Expanded Access by Addressing the Soaring Cost of a College Education
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. The Higher Education Opportunity Act, signed into law this summer, overhauls our nation's higher education laws, advancing reforms to address the soaring price of college and removing other obstacles that make it harder for qualified students to go to college. The bill encourages colleges to rein in prices and provide consumers with helpful information, makes textbook costs more manageable, and simplifies the federal student aid application process.
Cracked Down on the Student Loan Scandal
Democrats took action on the student loan scandal, including in the Higher Education Opportunity Act provisions instituting key reforms in the student loan industry, to protect student borrowers and to prohibit conflicts of interest between universities and lenders.
Ensured Access to Loans Amidst Turmoil in the Credit Market
Turmoil in the U.S. credit markets has made it difficult for some lenders in the federally guaranteed student loan program to secure the capital needed to finance college loans, leading some lenders to scale back their lending activity. The Democratic-led Congress took action and passed legislation to ensure that contingency plans are in place that would provide students and families with continued, uninterrupted access to federal loans, regardless of what's happening in the credit markets. The Ensuring Continued Access to Student Loans Act, signed into law this spring, would provide new protections, in addition to those in current law, to ensure that families can continue to access the loans they need to pay for college.