McCaskill Urges President to Sign Student Debt Relief and Financial Aid Bill

Press Release

McCaskill Urges President to Sign Student Debt Relief and Financial Aid Bill

U.S. Senator Claire McCaskill today joined 78 of her Senate colleagues in passing final higher education legislation aimed at making college more affordable and accessible to low-income and middle-class students. As the bill makes its way to the President, McCaskill urged him to sign the legislation into law and offer thousands of Missourians a shot at better opportunities.

"More and more Missourians are finding college to be financially out of reach due to rising college tuition," McCaskill said. "The bill we sent to the President today gives more students a chance to get a quality college education and help America remain competitive in a growing global marketplace. I urge the President to sign this bill into law to help achieve that goal."

Statistics show that it is becoming harder and harder for American families to afford to college. In Missouri, between the 2000-2001 and 2005-2006 school years, the cost of attending a four-year public college in Missouri (including tuition, fees, room and board) increased 45 percent, from $8,201 to $11,861. The cost of attending a four-year private college in Missouri has increased 26 percent. Meanwhile, family incomes in Missouri are not keeping up - the median household income actually decreased by 5 percent over the same time period.

As a result, Missouri students are taking on more debt to pay for college. 59 percent of Missouri students graduating from four-year institutions in the 2004-2005 school year graduated with debt, owing an average of $16,505.

The bill heading to the president's desk today is a compromise between the House of Representatives and Senate versions of higher education legislation McCaskill voted for earlier this year. Like that bill, today's legislation contains provisions that will directly help middle-class college students and their families.

The legislation will work to address these problems by:

Increasing Student Aid and Addressing Rising College Debt
- Increases access for low-income students by increasing the maximum Pell Grant by $500 next year and to $5,400 by 2012, and simplifies the financial aid process for low-income students by increasing the income level at which a student is automatically eligible for the maximum Pell;
- Eases the burden on borrowers by cutting student loan interest rates in half to 3.4 percent for undergraduate students with subsidized student loans;
- Protects borrowers by capping monthly loan payments at 15 percent of discretionary income;
- Protects working students and ensures they are not penalized by increasing the amount of student income that is sheltered from the financial aid process; and
- Encourages public service by providing loan forgiveness for public service employees.

Increasing College Access and Preparation Programs
- Restores funding for Upward Bound, a key college access program, and creates College Access Challenge Grants to increase college outreach activities in every state.

Bringing Good Teachers to the Schools That Need Them Most
- Creates incentives for good teachers to teach in high-need schools by establishing new TEACH Grants that provide scholarships of $4,000/year for high-achieving undergraduate and graduate students who commit to teaching a high-need subject in a high-need school.

Reforming the Student Loan System so it Works for Students, Not Banks
- Ensures the system works for students and saves taxpayer dollars by directing unnecessary lender subsidies to student aid and injecting competition into the loan program.

Strengthening Minority Serving Institutions
- Invests an additional $500 million in these institutions.

The Senate Higher Education Act Reauthorization Bill Would Build on These Efforts By:
- Protects students by ensuring colleges recommend lenders to their students based on the best interest of students, not the self-interest of financial aid officers, and cleans up the industry by prohibiting payments from lenders to schools/school officials that create conflicts of interest;
- Simplifies the FAFSA, by immediately creating a new 2-page EZ-FAFSA for low-income students, and phases out the current 7-page FAFSA for all applicants within 5 years;
- Facilitates student planning by creating a pilot program that allows students to receive an aid determination or estimate in their junior year of high school; and
- Holds colleges accountable for rising costs by publicizing colleges whose costs increases outstrip those of their peers, and ensures students and parents have access to objective data about the cost of college.

Source