The Daily Advertiser - Two Acts Could Ease Higher Education Costs

News Article

By Megan Wyatt

College could become more affordable for the middle class if an initiative by U.S. Sen. Mary Landrieu, D-New Orleans, receives enough support.

Landrieu's Passport to the Middle Class plan includes an act that would increase the maximum Pell Grant award from $5,730 to $8,900 per year and another that would allow those with student loan debt to refinance to a rate of 3.86 percent.

"A college degree should help individuals build dreams, not debt," Landrieu said in a prepared statement.

The Middle Class Creating Higher Education Affordability Necessary to Compete Economically Act aims to combat the increasing cost of college through increasing the federal Pell Grant award amount.

When the grant award was created in 1972, it covered the full cost of college. The current maximum award covers only about 40 percent of the cost to attend a public four-year college in Louisiana.

Landrieu's Bank on Students Emergency Loan Act would allow borrowers with private and federal undergraduate loans to refinance at 3.86 percent, the current rate agreed upon last summer in the Bipartisan Student Loan Compromise.

There are almost 600,000 student loan borrowers in Louisiana who have an average loan of $22,789. The new interest rate could save borrowers an average of $8,000 over the span of a 25-year loan.

Landrieu plans to fund the acts through the Buffett Rule, part of a tax plan proposed by President Barack Obama that would apply a minimum tax rate of 30 percent on those who make more than $1 million per year.

The Louisiana higher education budget has been cut by $700 million in the last five years. This has created a tuition and fee hike of about 40 percent from 2008 to 2014.

"A basic American principle is when you work hard and play by the rules, you deserve a fair shot to build a prosperous future and earn a passport to the middle class," Landrieu said.

Senator race contenders Rep. Bill Cassidy, R-Baton Rouge, and Rob Maness, a Tea Party challenger from Madisonville, did not return The Advertiser's calls and emails concerning the initiative.

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