The incentive of getting something for nothing still permeates the American poor. Gaming profits, food stamps and AFDC money come to mind. Now the cost of education is going down for students from poor families.
On Friday, September 7, Congress adopted legislation that will significantly increase student financial aid to low- and moderate-income college students, providing the single largest increase in college aid since the GI bill. The College Cost Reduction and Access Act, H.R. 2669, will cut federal subsidies for private lenders in order to increase Pell grants, reform student loans and increase the number of teachers in challenging schools. The legislation increases college financial aid by approximately $20 billion over the next five years, paid for by reducing excessive federal subsidies to lenders in the college loan industry.
According to the House Committee on Education and Labor, specific provisions of the bill include:
Cutting interest rates in half on subsidized student loans over the next four years, saving the average student $4,400 over the life of their loan.
Making student loan payments more manageable for borrowers by guaranteeing that borrowers will not have to pay more than 15 percent of their discretionary income in loan repayments, and allowing borrowers to have their loans forgiven after 25 years.
Increasing the maximum Pell Grant scholarship to $5400 over the next five years, up from $4050 in 2006. Pell Grant scholarships will receive an overall increase of nearly $12 billion, almost double the investment of H.R. 2669.
Expanding eligibility through needs analysis to include and serve more students with financial need.
Eliminating tuition sensitivity to help the neediest students at the most cost efficient schools.
Providing upfront tuition assistance to qualified undergraduate students who commit to teaching in public schools in high-poverty communities or high-need subject areas.
Providing loan forgiveness after 10 years for public servants, including military service members, first responders, firefighters, nurses, public defenders, early childhood educators, librarians, and others.
The legislation was sent to the President who has announced he will sign the bill into law.
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