In yesterday's excitement, almost overlooked, was the house passage of H.R.2669 College Cost Reduction Act of 2007 273 - 149. According to The House Committee On Education and Labor "college costs have grown nearly 40 percent in the last five years. Students are graduating from college with more debt than ever before. And many would-be students are holding off on going to college, or skipping it altogether, because they don’t believe they can afford it." The Committee says the The College Cost Reduction Act of 2007
will provide the single largest investment in higher education 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. . . .By boosting scholarships and reducing loan and tuition costs, the College Cost Reduction Act of 2007 makes an historic investment in America’s college students, its economic competitiveness, and its future, while maintaining fiscal responsibility.According to the committee the legislation is intended to Strengthen the Middle Class by Making College More Affordable by
* Cutting interest rates in half on subsidized student loans over the next five years (3.4% by 2012);
* 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 in economic hardship to have their loans forgiven after 20 years; and
* Increasing federal loan limits to provide borrowers with additional assistance in paying for college and to help them rely less on costlier private loans.
The Bill also expands eligibility and increases the maximum Pell Grant scholarship by at least $500 over the next five years, ultimately reaching a maximum scholarship of at least $5,200.
Another section provides upfront tuition assistance to qualified undergraduate students who commit to teaching in public schools in high-poverty communities or high-need subject areas.
The legislation includes a mechanism for the forgiveness of some of the loans of first responders, law enforcement officers, firefighters,nurses, public defenders, prosecutors, early childhood educators, and librarians. The press release acknowledges that the bill also provides loan forgiveness for others. Republicans charge that "others" includes federal employees, Members of Congress and lobbyists for not for profit organizations.
Finally it establishes a partnership with federal, state and local government entities and philanthropic organizations through matching challenge grants aimed at increasing the number of first generation and low-income college students.
The student loan industry is not happy. The Campaign to Reform Student Loans issued a press release blasting the bill.
The Republicans were vocal in their opposition. One provision in particular brought the ire of Minority Leader John Boehner (R-Ohio), who charged that language creating a new loan forgiveness program would
allow virtually anyone who works for the federal government or a non-profit organization – including Members of Congress and lobbyists working for non-profit entities — to have their student loans forgiven at the expense of American taxpayers.That charge brought an angry denunciation from Education Chairman Rep. George Miller (D-Calif.) The debate became very heated.
Because of a threatened veto, the bill faces an uncertain future. Inside Higher Ed has more information.
