Mcnerney Backs Bill to Make College More Affordable

Press Release

MCNERNEY BACKS BILL TO MAKE COLLEGE MORE AFFORDABLE

Washington, D.C. - Continuing an effort that began during the very beginning of his term in Congress, Congressman Jerry McNerney (CA-11), concerned about the rising cost of a college education, today backed legislation to make college more affordable.

The College Cost Reduction and Access Act, H.R. 2669, offers the single largest investment in college financial assistance since the G.I. Bill - at no new cost to U.S. taxpayers. The College Cost Reduction and Access Act would boost college financial aid by more than $20 billion over the next five years and cuts 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.

"This fall, families across California are sending their children to college where they'll face higher tuition costs and fees," Rep. McNerney said. "This legislation will expand college access to American students by making college more affordable. I encourage President Bush to sign it as soon as possible."

Under the legislation, the maximum value of the Pell Grant scholarship would increase by $1,090 over the next five years, reaching $5,400 by 2012. Close to 6 million low- and moderate-income students across the country would benefit from this increase.

To reduce the cost of loans for millions of student borrowers, the legislation would cut interest rates in half on need-based student loans, from 6.8 percent to 3.4 percent over the next four years. The rate cut will save the typical student borrower a total of $4,400. About 6.8 million students nationwide take out need-based loans each year.

In addition, the legislation would prevent students 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 and Access Act also 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;
* Loan forgiveness after 10 years of public service and loan repayment for college graduates that go into vital public service jobs; and
* Strategies to help colleges contain costs and make online information on college costs for students and parents more user friendly.

H.R. 2669 originally passed the House back in July. The Senate passed a version of the legislation, as well. Today's vote, the College Cost Reduction and Access Act was the legislation that resulted from a conference between the House and Senate to reconcile the two different versions of the bill. The Senate today also passed the so-called conference report, which means this legislation now proceeds to President Bush for his signature.

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