[StBernard] Rep. Melancon Votes to Make College More Affordable for Louisiana Students

[Westley Annis]

WASHINGTON, D.C. – U.S. Rep. Charlie Melancon (D –LA) today joined a bipartisan majority in the House in support of legislation that would make college more affordable and offer the single largest investment in college financial assistance since the 1944 GI Bill at no new cost to U.S. taxpayers. The Senate also approved the bill, the College Cost Reduction and Access Act, today. The bill now goes to President Bush, who is expected to sign the bill into law. 

 

While family income has failed to increase, the cost of living and the cost of a college education have continued to rise, placing added pressure on aspiring college students and their families, and preventing some students from attending college. The College Cost Reduction and Access Act would boost college financial aid by more than $20 billion over the next five years and cut interest rates on subsidized student loans in half over the next four years. The bill pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $20.9 billion. It also includes $750 million in federal budget deficit reduction. 

 

“Students who work hard should be able to earn their college degrees without burying themselves in crushing debt,” said Rep. Charlie Melancon.  “The College Cost Reduction Act of 2007 will help millions of students pay for college by increasing federal scholarships and lowering student loan interest rates, while also providing incentives for students who commit to teaching at high-need schools or to entering public service professions.  Students in Louisiana stand to receive an estimated $479,452,000 in additional financial aid over the next five years as a result of this historic legislation.  This bill will make the dream of higher education and greater opportunity more attainable for thousands of Louisianians, and I am proud to support it.”

 

The College Cost Reduction Act would help low- and moderate-income students pay for college by increasing the maximum value of federal Pell Grant scholarships by $1,090 over the next five years, reaching $5,400 by 2012, thus restoring the Pell’s purchasing power. The Pell Grant increases would be phased in, beginning with a $490 increase in the 2008 to 2009 academic year, by an additional $200 in the 2010 to 2011 academic year, and by an additional $400 in the 2012 to 2013 academic year — for a total increase of $1,090 over the current cap.  

 

In Louisiana, it is estimated 94,109 students could benefit from this increase in Pell Grants.  Close to 6 million low- and moderate-income students across the country would benefit from this increase.  

 

The measure also adjusts eligibility requirements for Pell Grants by raising the income threshold, below which families automatically qualify for such grants, to $30,000 from the current threshold of $20,000. 

 

The legislation would cut interest rates in half on need-based student loans, reducing the cost of those loans for millions of student borrowers. Like legislation Rep. Melancon supported in the House earlier this year, the College Cost Reduction Act would cut interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years. Once fully phased-in, this would save the typical student borrower – with $13,800 in need-based student loan debt – $4,400 over the life of the loan. 

 

In Louisiana, over 68,000 students take out need-based loans each year at four-year public schools.  Nationwide, about 6.8 million students take out need-based loans each year.

 

The legislation would also prevent 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 Act includes a number of other provisions that would 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. Students who pursue careers as public school teachers would receive up-front tuition assistance of $4,000 per year, to a maximum of $16,000 – providing aid to at least 21,500 undergraduate and graduate students who commit to teaching a high-need subject in high-need schools for four years.

 

*	Loan forgiveness for college graduates that go into public service professions.   Public servants would receive loan forgiveness of $5,000 – providing aid to at least 257,000 first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, early childhood educators and others. The bill also provides complete loan forgiveness for public sector employees after 10 years of service.

 

*	Supporting student borrowers serving in the military by eliminating the current three-year limitation on the period for which members of the armed forces could receive deferments on their student loan payments.

 

*	Landmark new investment of $510 million over five years in Historically Black Colleges and Universities, Hispanic Serving Institutions and minority serving institutions. 

 

*	Strategies to help colleges contain costs and make online information on college costs for students and parents more user friendly.

 

The College Cost Reduction Act provides the greatest increase in student aid since the ‘GI Bill’ President Franklin Roosevelt signed into law in 1944. The GI Bill enabled 7.8 million veterans of World War II to participate in education or job training programs.

 

A broad coalition of student advocacy groups and labor organizations support the College Cost Reduction Act. 

 

# # #