Congresswoman Lucille Roybal-Allard joined her colleagues in the U.S. House and Senate in voting today (September 7) to approve legislation that makes the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college – and doing so at no new cost to U.S. taxpayers.

The legislation, the College Cost Reduction and Access Act, will boost college financial aid by about $20 billion over the next five years. The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $20.9 billion. It also includes nearly $750 million in federal budget deficit reduction.

“At a time when college costs continue to skyrocket, I am proud to join my colleagues in voting for the College Cost Reduction and Access Act that makes college more affordable for 6.8 million college students with need-based federal student loans,” Congresswoman Lucille Roybal-Allard said.  “The measure also increases Pell Grant scholarships, which help more than 5.5 million mostly low-income students afford a college education.”

“According to the College Board, tuition and fees at most four-year public institutions have soared in recent years, rising 35 percent since 2001.  These high costs are financial barriers for many students seeking a college degree,” Congresswoman Lucille Roybal-Allard said.  “The College Cost Reduction and Access Act will significantly help talented students from my district, many of whom are the first in their families to attend college and rely on Pell Grants and need-based federal student loans to pay for the cost of college.”

Under the legislation, the maximum value of the Pell Grant scholarship will increase by $1,090 over the next five years, reaching $5,400 by 2012. Nearly six million low-and moderate-income students will benefit from this increase.

The measure also makes landmark investments in Hispanic-Serving Institutions (HSIs), where Hispanics constitute 25 percent or more of the total enrollment at either the graduate or undergraduate level or both.  Hispanic-Serving Institutions serving students from the 34th Congressional District include California State University-Los Angeles, East Los Angeles College and Cerritos Community College.  The College Cost Reduction and Access Act of 2007 provides $200 million in grants to HSIs over the next five years.  This investment focuses on building the capacity of HSIs to produce more graduates in science, technology, engineering and mathematics.  

The College Cost Reduction and Access Act cuts interest rates in half on need-based student loans, reducing the cost of those loans for millions of student borrowers.  The measure cuts interest rates from 6.8 percent to 3.4 percent over the next four years. Once fully phased-in, this will save the typical student borrower – with $13,800 in need-based student loan debt – $4,400 over the life of the loan. For the average four-year college student in California, the savings would be $4,830 over the life of their loans. 

“The savings made possible through this legislation will be a lifeline for low- and middle- income students as they deal with increased financial pressures after college, such as paying for rent, utilities, groceries, health care, and other essential costs, in addition to paying off their loans,” Congresswoman Roybal-Allard said.

The legislation also prevents 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. 

The College Cost Reduction and Access Act includes a number of other provisions that will 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 after 10 years of public service and loan repayment for college graduates that go into vital public service professions such as first responders, law enforcement officers, firefighters, nurses, public defenders and prosecutors;

The College Cost Reduction and Access Act is supported by a broad coalition of student advocacy groups and labor organizations.

###

(Congresswoman Lucille Roybal-Allard provides parents and students with useful information about federal loans, internships, fellowships, private scholarships and work-study opportunities.  Workshops are also coordinated by her staff to help parents and students fill out college financial aid forms.  For students interested in attending our nation's U.S. service academies, the congresswoman hosts an annual academy workshop.  The academies provide a free college education in return for five years of military service following graduation.  To learn more, visit www.house.gov/roybal-allard or call (213) 628-9230.)
 

-- ### --