Rep. Courtney, House Pass Major Legislation Expanding College Affordability Programs

Press Release

REP. COURTNEY, HOUSE PASS MAJOR LEGISLATION EXPANDING COLLEGE AFFORDABILITY PROGRAMS

Congressman Joe Courtney announced today that the House of Representatives passed H.R. 2669, College Cost Reduction Act of 2007, which seeks to reduce college costs for students and their families without adding an additional tax burden to the public. The Senate is expected to consider this legislation in the weeks to come.

Congressman Courtney aided in crafting the landmark legislation. During review of the legislation in June, Congressman Courtney won support for an initiative to make college more affordable for students in eastern Connecticut and across the nation. The Connecticut Congressman offered an amendment to increase funding for the Pell Grant program by an additional $900 million above an already increased proposed funding level.

This is being hailed as the greatest investment in higher education since the GI Bill.

"The College Cost Reduction Act will give students and their families in eastern Connecticut greater financial support in the future, which we know, every bit of financial aid helps at a time of rising college costs," stated Congressman Joe Courtney. "I will continue to work with Chairman George Miller to help qualified students who wish to pursuer a higher education realize that dream."

Congressman Courtney's amendment and the underlying bill will serve Connecticut students well by investing an additional $130,000,000 in loan and Pell aid to students and families over 5 years. Over 33,500 students in Connecticut's four year colleges take out need based loans each year. With an average debt of a need based loan borrower after four years of college approximately $14,263, this legislation may save students $4,560.

Through the year 2011, nearly 40,000 Connecticut college students may benefit from passage of the College Cost Reduction Act.

Under the legislation, the maximum value of the Pell Grant scholarship would increase by $500 over the next five years. When combined with other Pell scholarship increases passed or proposed by the new Congress this year, the maximum Pell Grant would reach $4,900 by 2008 and $5,200 by 2011, up from $4,050 in 2006, thus restoring the Pell's purchasing power. Over 6 million low- and moderate-income students would benefit from this increase. Pell Grant levels had been frozen for the last six years by prior Congresses at $4050.

Connecticut's students and families will receive just under $144 million over five years in additional benefits in the form of student loans and Pell Grants alone as a result of the College Cost Reduction Act.

In Connecticut, an additional 3,945 students will qualify for the Pell Grant over the next five years.

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 passed by 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. 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 20 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:

o Tuition assistance for excellent undergraduate students who agree to teach in the nation's public schools;

o Loan forgiveness for college graduates that go into public service professions;

o Increased federal loan limits so that students won't have to rely as heavily on costlier private loans; and

o New tuition cost containment strategies.

The additional funding abides by ‘pay-go' rules established by the new Democratic Congress and will not add to the federal budget or require higher taxes.

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