Obama Unveils Bill to Make College More Affordable
Monday, March 28, 2005
FOR IMMEDIATE RELEASE
Washington Contact: Robert Gibbs or Tommy Vietor, (202) 228-5511
Illinois Contact: Julian Green (312) 886-3506
Date: March 28, 2005
OBAMA UNVEILS BILL TO MAKE COLLEGE MORE AFFORDABLE
CHICAGO - U.S. Senator Barack Obama (D-IL) today unveiled the Higher Education Opportunity through Pell Grant Expansion or HOPE Act, to help make college more affordable for thousands of Illinois families during a news conference at the University of Illinois - Chicago. The HOPE Act is the first bill Senator Obama will introduce in the United States Senate
"The first bill I will introduce comes from a promise I made during the campaign and one that I intend to keep now that I'm in Washington. It's called the Higher Education Opportunity through Pell Grant Expansion Act of 2005 the HOPE Act. And it is designed to help make college more affordable."
College tuition rates are rising almost 10 percent a year. Because of these rising prices, over 200,000 students were priced out of college altogether just last year.
"Right now, in schools and playgrounds and backyards across America, children are dreaming about what they want to be when they grow up. And as their parents watch tomorrow's astronauts and doctors and teachers in action, they know that so many of those dreams are dependent on a college diploma," said Senator Obama.
"But if they're like the families I met here in Illinois during the course of the campaign, they also worry that they may not be able to give their kids a chance at that diploma," said Obama. "Everywhere I go, I hear the same story: we work hard, we pay our bills, we put away savings, but we just don t know if it s going to be enough when that tuition bill comes in the mail."
Pell Grants are need-based awards used by 5.3 million undergraduate students to fund their education and more than 85% of Pell Grant recipients come from families with an income of less than $40,000. However, Pell Grants are not indexed to the rising price of tuition or inflation. As a result, the current $4,050 Pell Grant maximum is $700 less in real terms than the maximum grant 30 years ago. Pell grants now cover only 23 percent of the total cost of the average four-year public college.
"We need to increase the Pell Grant maximum award to $5,100 and continue to raise it in the coming years to help students keep up with the rising cost of college," Obama said.
Obama said that he will pay for this legislation by closing loopholes that guarantee banks and private lenders an additional $2 billion in taxpayer subsidies every year on top of the interest that college students and their families are already paying on their loans. The bill would end the guarantee of 9.5 percent rate of return that is paid to private lenders in subsidies even though most students pay rates of 3.4 percent.
"When our children dream about their future, they need to know that those dreams are within their reach," Obama said. "A college education forms the foundation of the opportunity society that will keep this country strong and growing in the 21st century. I know we can work together to get this done, and I look forward to doing so."