Capps Celebrates Final Passage of Record College Aid Package

Press Release

Capps Celebrates Final Passage of Record College Aid Package

As Students Return to School Democratic-led Congress Delivers on Promise to Help Make College More Affordable for Students and Their Families

WASHINGTON, DC - Today Congresswoman Lois Capps (D-CA) celebrated another major achievement for the Democratic-led Congress with the passage of the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college. The House approved the College Cost Reduction and Access Act (H.R. 2669) by a vote of 292 to 97, while the Senate voted 79 to 12 to approve the bill. The legislation now goes to the President's desk for his signature.

"As students across the Central and South Coasts return to school, I'm proud to report that the Democratic-led Congress has delivered a historic increase in student aid," said Capps. "This is another major accomplishment that will make a real difference in the lives of our students and their families. This important initiative will also encourage students to pursue careers in public service, like nursing and police work, and help ensure America remains competitive in the global economy."

The College Cost Reduction Act of 2007 takes several steps to help students and their families' meet rapidly increasing higher education costs. The bill would increase the maximum value of the Pell Grant scholarship by $1,090 over the next five years, reaching $5,400 by 2012. This increase would finally strengthen the purchasing power of the scholarship, which in recent years had been frozen at $4,050 until the new Democratically-led Congress boosted its value to $4,310 earlier this year. In California over half a million low- and moderate-income students would benefit from this latest increase.

The bill would also cut interest rates in half on need-based student loans, significantly reducing the cost of those loans for millions of student borrowers. In California approximately 228,000 students take out need-based loans each year at 4-year public schools and the average graduate accumulates over $15,000 in student loans. By cutting the interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years, the average student in California would save over $4,800 over the course of their loan.

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.

Finally, the bill would support and encourage students to pursue careers in public service. The legislation offers up-front tuition assistance of $4,000 per year for excellent undergraduate students who agree to teach in the nation's high need public schools and the bill provides up to $5,000 in loan forgiveness for college graduates that go into public service professions. Public servants in critical positions such as firefighters, nurses, and police officers would also receive complete loan forgiveness after 10 years of service.

Source