“On Sept. 7, Congress approved the College Cost Reduction and Access Act. The legislation provides millions of dollars in additional student grants, at no new cost to taxpayers. The bill trims excessive subsidies that benefit a handful of banks and directs them to millions of students and families who are working to pay for college, Luke Swarthout, higher education advocate for USPIRG.””
On Sept. 7, Congress approved the College Cost Reduction and Access Act. The legislation provides millions of dollars in additional student grants, at no new cost to taxpayers.
The bill trims excessive subsidies that benefit a handful of banks and directs them to millions of students and families who are working to pay for college, Luke Swarthout, higher education advocate for USPIRG.
The bill allows for forgiveness of student loans for graduates who work in public service professions for 10 or more years, also limiting monthly payments on federal loans to 15 percent of the borrower’s income.
This will protect borrowers with low salaries from unmanageable payments.
The Pell grant, the basic federal grant for middle- and low-income students, will be raised by almost $1,200 over the next five years.
The College Cost Reduction and Access Act is the most meaningful higher education reform in more than 15 years, Swarthout said.
While the bill had support from many Republicans, some, who had received generous campaign contributions from lenders in the past, attacked parts of the legislation as socialist.
Those same lenders campaigned hard against the legislation, which was perceived as a threat to their $85 million-per-year student loan industry. They warned that the bill would compromise the federal loan program, force some of them out of business, reduce competition and inevitably services to students.
Joe Belew, president of the Consumer Bankers Association, claimed the bill would come to be viewed as irresponsible legislation that undermined rather than expanded college opportunity.
Howard P. McKeon of California, the ranking Republican on the House Education Committee, said the law did nothing at all to reduce the cost of college.
Representative George Miller of California, the Democratic chairman of the House Education Committee, disagreed with McKeon, saying the reality is that our bill restores the balance to this grossly unfair student loan system by directing funds to the students, not to the banks.
Over the next four years, the law will reduce federal subsidies to lenders by approximately $20 billion and halving the interest rate on need-based student loans. Roughly $12 billion of that money will go toward the Pell grant, which, unlike a loan, does not need to be paid back.
But what do the students think?
Dale Laird, a sophomore at the University of Akron, is majoring in communications.
I think it’s great – especially since tuition is outrageous.