College Cost Reduction and Access Act
On September 27, 2007 Chairman Miller's legislation, the College Cost Reduction and Access Act, was signed into law. The College Cost Reduction and Access Act of 2007 (H.R. 2669) will provide 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.
|Pell Grant Scholarships||2008-2009 school year|
|Interest rates on need-based loans||First decrease on July 1, 2008, when the interest rate was reduced from 6.8 percent to 6.0 percent. Interest rates will be lowered to 3.4 percent by July 1, 2011.|
|Income based repayment program||Borrowers with both new and existing loans will be eligible to enter into income based repayment starting July 1, 2009.|
|Up-front Tuition Assistance||Began during the 2008-2009 school year.|
|Loan forgiveness for public service workers||The 10 year period started on or after October 1, 2007|
Strengthen the Middle Class by Making College More Affordable
- Cutting interest rates in half on subsidized student loans over the next four years. The first interest rate cut (to 6% from 6.8%) took effect on July 1, 2008 and will save the typical student borrower beginning college in 2008 about $2,570 over the life of his or her 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.
Increase the Purchasing Power of the Pell Grant Scholarship
- 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. Combined with increases proposed by Congress this year, this legislation will significantly restore the Pell’s purchasing power.
- 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.
Ensure a Highly Qualified Teacher in Every Classroom
- Providing upfront tuition assistance to qualified undergraduate students who commit to teaching in public schools in high-poverty communities or high-need subject areas.
Encourage and Reward Public Service
- 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.
Encourage Philanthropic Participation in College Retention and Financing
Establishing 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.
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
- Guaranteeing $510 million over two years.