The College Cost Reduction Act of 2007 passed the House on July 11 by a vote of 273-149 and the Senate on July 24 by a vote of 95-0 providing the single largest increase in college aid since the GI bill. And it will do so at no new cost to taxpayers by cutting excess subsidies paid by the federal government to lenders in the student loan industry.
There are some differences in the two bills, the House bill, according to the Honorable George Miller, chairman of the House Committee on Education and Labor will:
Strengthen the Middle Class by Making College More Affordable
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Increase the Purchasing Power of the Pell Grant Scholarship
Ensure a Highly Qualified Teacher in Every Classroom
Encourage and Reward Public Service
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Encourage Philanthropic Participation in College Retention and Financing
Make Landmark New Investments in Historically Black Colleges and Universities, Hispanic-Serving Institutions, Tribally-Controlled Colleges and Universities, Alaska and Hawaiian Native Institutions, and Predominately Black Institutions
According to Senator Tom Harkin, chairman of the Appropriations Labor, HHS, Education sub-committee who said "At a time when higher education is more important than ever for career success, rapidly increasing tuition costs are pushing college out of many students’ reach. Those who can go to college often graduate with a mountain of debt that restricts their career choices...With this bill, Senate Democrats are fulfilling their promise to make it easier for America’s young people to obtain the tools they need to pursue the American dream."
The Collage Cost Reduction Act will reduce many students’ debt by cutting existing excess subsidies to the private loan program and channeling those savings into Pell Grants, which students do not have to repay. This legislation will boost the maximum Pell Grant from $4,310 to $5,100 next year and $5,400 by 2011.
In addition, the College Cost Reduction Act caps federal student loan payments at 15% of a borrower’s discretionary income, bringing needed relief to students with excessive loan burdens. For instance, a social worker with one child earning $35,530, with an average student loan debt of $22,727, would have his or her monthly payments reduced from $262 to $174, an $88 reduction.
This legislation would also encourage public service by providing loan forgiveness for graduates who pursue public service careers such as nursing, teaching or law enforcement. For example a starting teacher who earns $27284 and has the state average loan debt of $22,727 would have his or her loan payments capped at 15%. This would reduce the teacher’s monthly payments by $112, from $262 to $150. After 10 years of teaching, all remaining debt would be forgiven - in this case, a benefit worth $17,150.
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The House has passed some of the same provisions as those passed by the Senate when the Senate reauthorized the Higher Education Act of 1965 [HEA] but, although the House passed some of the same provisions as the Senate, it has yet to reauthorize the Higher Education Act of 1965. The bipartisan support in the Senate for the HEA was a far cry from the highly controversial debates that have taken place in the last four years.
Congress is supposed to reauthorize the HEA every five years and usually does so with little fanfare. But after it expired in 2003, the Senate repeatedly passed temporary extensions when it clashed with higher-education groups over regulation of the student-loan industry and, in general, how involved the federal government should be in higher education issues.
This article is based on information supplied by the offices of Senator Tom Harkin and the Honorable George Miller and is based in small part on the article by Zoe Tillman | Contributor to The Christian Science Monitor from the July 26, 2007 edition