(Warwick, R.I.) Tomorrow, President Bush will sign the historic College Cost Reduction and Access Act into law.  Congressman Jim Langevin joined his colleagues earlier this month in voting for this measure, which marks another legislative accomplishment for the 110th Congress.

“This new investment in college financial aid is critical,” said Langevin.  “In today’s economy, a college education is as important as a high school diploma was a generation ago.  Yet, college costs have grown nearly 40 percent in the last five years.  Students are graduating from college with more debt than ever before, and 200,000 students do not go to college every year because they can’t afford the cost. This historic legislation helps restore the American dream for those families.”

The College Cost Reduction Act, the single largest investment in education since the GI bill, will:
• Cut interest rates in half on subsidized student loans over the next four years
• Make student debt more manageable for those facing economic hardship
• Increase the purchasing power of the Pell Grant
• Encourage and reward public service by offering loan forgiveness and repayment for our most dedicated military service members, nurses, early childhood educators and others who take on some of the most needed and challenging - but not the most lucrative - professions
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. Approximately 21,590 Rhode Islanders are receiving Pell Grants currently.
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 take out need-based loans each year. Rhode Island students are expected to save about $4,420.

In addition, the legislation would protect students from 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. 
For Rhode Island, loans and Pell Grant aid to students and families over the next five years will increase to $127.4 million. Currently there are 19,649 Rhode Islanders with need-based loans at four-year public institutions. The average debt incurred by these students is approximately $13,822. 

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