Congresswoman Mazie K. Hirono today voted to approve legislation that would make the single largest investment in college financial aid since the 1944 G.I. Bill, helping millions of students and families pay for college - and doing so at no new cost to U.S. taxpayers. The legislation, the College Cost Reduction Act of 2007 (H.R. 2669), which the House passed by a vote of 273-149, would boost college financial aid by about $18 billion over the next five years.
For students and families in Hawaii, this amounts to a total increase in loan and Pell Grant aid of $32 million over 5 years. By cutting the cost of students loans, this legislation would save the typical student borrower in Hawaii $4,580 over the life of the loan.
"This bill is good news for students and families in Hawaii and across America. College will now be more affordable and more accessible to students as we increase Pell Grants and lower interest rates on student loans," said Congresswoman Hirono.
Congresswoman Hirono added, "Many students in Hawaii will also benefit from increased funding in this bill for colleges and universities serving Native Hawaiians and Alaska Natives. As a member of the Education and Labor Committee, I helped insert language in this bill that will increase funding for these schools by $30 million over the next five years. We also included a $10 million investment in institutions serving Asian and Pacific Islander populations that historically have had low education attainment."
In addition, H.R. 2669 includes provisions from a bill previously introduced by Congresswoman Hirono that provides college loan forgiveness for graduates who enter the field of early education. Congresswoman Hirono said, "I introduced the Early Educator Loan Forgiveness bill because many students have massive college loans, so they are unable to pursue a career in early childhood education or to remain in this field for a long time because it pays too little. Today Congress is taking a step in the right direction to encourage our nation's best and brightest students to consider teaching early childhood education."
H.R. 2669 pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $19 billion. It also includes nearly $1 billion in federal budget deficit reduction. The Senate is expected to vote on similar legislation this month.
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 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, thus restoring the Pell's purchasing power. About 6 million low- and moderate-income 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 in equal steps over the next five years.
A broad coalition of student advocacy groups and labor organizations support the College Cost Reduction Act.