Crowley Votes to Provide Historic College Financial Aid Increase

Press Release

Crowley Votes to Provide Historic College Financial Aid Increase

US Congressman Joseph Crowley (D-Queens & the Bronx) today supported enactment of the single largest investment in college financial aid since the 1944 GI Bill. The College Cost Reduction and Access Act (HR 2669), which will help millions of students and families pay for college without increasing taxes, passed the US House of Representatives by a 292 - 97 vote and now goes to the President's desk for his signature.

"A college degree can open doors and job opportunities. Unfortunately, tuition costs are on the rise, making it more difficult for many hard-working families to help their children pay for college," Crowley said. "I am proud that the Democratic majority in Congress made increasing student financial aid a top priority. The legislation passed will make college education more affordable without costing taxpayers a single dollar more."

The College Cost Reduction and Access Act combines key elements from the House and Senate bills that were passed in July. The legislation would boost college financial aid by more than $20 billion over the next five years. The bill pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $20.9 billion. It also includes $750 million in federal budget deficit reduction.

Under the legislation, the maximum value of the Pell Grant scholarship would increase by $1,090 over the next five years, reaching $5,400 by 2012. This increase would fully restore the purchasing power of the scholarship, which in recent years had been frozen at $4,050 until Congress boosted its value to $4,310 earlier this year. Nationally, close to 6 million low- and moderate-income students would benefit from this increase.

To reduce the cost of loans for millions of student borrowers, the legislation would cut interest rates in half on need-based student loans, from 6.8 percent to 3.4 percent over the next four years. Once fully phased-in, this would save the typical student borrower - with $13,800 in need-based student loan debt - $4,400 over the life of the loan. About 6.8 million students take out need-based loans each year. The state of New York has the greatest number of students taking out need based loans for four-year public colleges.

In addition, the legislation would 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 25 years.

The College Cost Reduction and Access Act also 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 after 10 years of public service and loan repayment for college graduates that go into vital public service jobs;
• Landmark investments in Historically Black Colleges and Universities, Hispanic Serving Institutions and other minority serving institutions; and
• Strategies to help colleges contain costs and make online information on college costs for students and parents more user friendly.

President Franklin Roosevelt signed the GI Bill into law in 1944. The original law enabled 7.8 million veterans of the second World War to participate in education or job training programs.

Congressman Crowley stated, "Upon enactment of this legislation, the dream of obtaining a higher education will be within reach for more Americans. I urge the President to sign this legislation, which will help so many of my constituents, into law immediately."

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