Spratt Votes to Make College More Affordable
House passes single largest investment in college aid since GI Bill
WASHINGTON – U.S. Rep. John Spratt (D-SC) today voted for legislation to help millions of students and families pay for college, at no new cost to taxpayers. The House passed the College Cost Reduction Act of 2007 (H.R. 2669) by a vote of 273-149.
“This bill is the largest single investment in college financial aid since the GI Bill, and one of the best decisions we can make,” said Spratt.
The College Cost Reduction Act was provided for in the Budget Resolution for 2008, which Spratt, as Budget Committee Chairman, prepared. “I am pleased to have had a hand in making this bill possible,” said Spratt. “It will make a big difference for the millions of students who depend on college student loans and Pell Grants.”
The legislation would boost college financial aid by about $18 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 about $19 billion, thus reducing the federal budget deficit by more than $1 billion. The Senate is expected to vote on a similar bill this month.
“A college education should be as accessible as high school, and passage of this bill makes that more likely,” Spratt said.
Spratt said the bill would increase the maximum value of the Pell Grant scholarship by $500 over the next five years. These changes, in combination with other Pell grant increases that the Democratic Congress has passed or proposed this year, will boost the maximum Pell Grant to $4,900 in 2008 and to $5,200 in 2011 — up from the $4,050 where it had been frozen from 2003 through 2006. The increase would help about six million low- and middle-income students afford college.
Spratt noted that over 87,000 students in South Carolina would benefit from a $500 increase in the maximum Pell Grant.
Like legislation passed by the House earlier this year, the College Cost Reduction Act would cut interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years. This would eventually save the typical borrower — with $13,800 of federal student loans — $4,400 over the life of the loan. Almost 7 million students take out need-based loans each year.
In addition, the bill would keep students from incurring unmanageable amounts of federal debt by requiring them to spend no 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 20 years.
The bill 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 for college graduates who go into certain public service professions;
- Increased federal loan limits so that students won’t have to rely as heavily on costlier private loans;
- New tuition cost containment strategies; and
- An increase to $500 million for investments in Historically Black Colleges and Universities, Hispanic Serving Institutions and minority serving institutions.
# # #
