Lowey Votes for Largest Investment in College Aid since the GI Bill

Press Release

Lowey Votes for Largest Investment in College Aid since the GI Bill

Congresswoman Nita Lowey (D-Westchester/Rockland) today voted for legislation that would make the single largest investment in college financial aid since the 1944 Montgomery GI Bill. The legislation would help millions of students and families pay for college, at no new cost to U.S. taxpayers.

"As the cost of a college education skyrockets, families need all the help they can get to keep a college degree within reach," Lowey said. "This bill will protect and expand financial assistance for families, opening the door to education and opportunity for millions of young men and women."

The College Cost Reduction Act of 2007, which the House passed today, would boost college financial aid by about $18 billion over the next five years.

Under the legislation, the maximum value of the Pell Grant would increase by $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 in 2008 and $5,200 in 2011, up from $4,050 in 2006. About six million students 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.

The legislation would also prevent student borrowers from facing unmanageable levels of federal student debt by guaranteeing that borrowers will never have to spend more than 15 percent of their yearly discretionary income on loan repayments and by allowing borrowers in economic hardship to have their loans forgiven after 20 years.

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:

* Tuition assistance for excellent undergraduate students who agree to teach in the nation's public schools;
* Loan forgiveness for college graduates who go into public service professions;
* Increased federal loan limits so that students won't have to rely as heavily on costlier private loans;
* New tuition cost containment strategies; and
* Landmark investments in Historically Black Colleges and Universities, Hispanic Serving Institutions and minority serving institutions.

The legislation pays for itself by reducing federal subsidies paid to lenders in the college loan industry by $19 billion. The Senate is expected to vote on similar legislation this month.

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