Today, Rep. Lois Capps (D-Calif) is marking the anniversary of the historic college aid package, the Student Aid and Financial Responsibility Act (SAFRA). The package is the largest investment in college aid in our nation's history, and does not add a dime to the deficit. The investment is fully paid for by eliminating taxpayer subsidies to big banks and transitioning higher education institutions to the U.S. Department of Education's Direct Lending program. In the UC system, about one-third of all undergraduates-nearly 65,000 students - receive Pell Grants. Most are from families earning less than $30,000 per year.
"The Student Aid and Financial Responsibility Act is making college more affordable for the over 1 million students in California that receive Pell Grants. If America is going to "out-innovate" and "out-compete" our global competitors, our workforce needs to be prepared for the 21st century. In the face of massive cuts to the UC and CSU systems at the state level, the federal resources are vital to ensuring our students can continue to afford college," said Capps.
The law also invests $750 million in initiatives that bolster college access and completion support, including key efforts to help institutions retain their students. The bill will result in over $75 million over the next five years for these initiatives for students in California.
In addition, this landmark law invests over $401,256,450 in Historically Black Colleges and Universities and Minority-Serving Institutions in California to provide students with the support they need to stay in school and graduate.
The new law also makes federal student loans more affordable for borrowers to repay -- strengthening the Income-Based Repayment program that a Democratic-controlled Congress created in 2007. Finally, the legislation makes student loans more efficient, reliable and stable -- by converting all new federal student lending to the stable, effective and cost-efficient Direct Loan program. This saves taxpayers billions of dollars and also improves the loan program for students.