Kildee Votes to Make College More Affordable

Washington, D.C. – Congressman Dale E. Kildee (D-MI) today joined a majority of the House in voting for legislation that would make the single largest investment in college financial aid since the 1944 GI Bill.  H.R. 2669, The College Cost Reduction and Access Act would help millions of students and families pay for college while adding no new cost to U.S. taxpayers.

The bill, which the House passed by an overwhelming bipartisan vote of 292-97, would boost college financial aid by more than $20 billion over the next five years.  H.R. 2669 pays for itself by reducing $20.9 billion in excessive federal subsidies paid to lenders in the college loan industry.  It also includes $750 million in federal budget deficit reduction.

“Students in the State of Michigan would benefit from an increase of more than $920 million dollars in loan and Pell aid over 5 years,” said Kildee.  “This bill will help to ensure that families across Michigan who are sending their children to college are not overwhelmed by debt when they graduate.”

Currently more than 180,000 Michigan students receive Pell Grants.  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.  This increase would fully restore the purchasing power of the scholarship, which in recent years had been frozen at $4,050 before Congress boosted its value to $4,310 earlier this year.  Close to 6 million low- and moderate-income students across the country would benefit from this increase.

To reduce the cost of loans for 143,000 Michigan students at four-year institutions, 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.  Once fully phased-in, this would save the typical Michigan student borrower – with $13,256 in need-based student loan debt – $4,240 over the life of the loan.  About 6.8 million students take out need-based loans every year.

In addition, the legislation would 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 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.

The Senate also approved the College Cost Reduction and Access Act today.  The bill now goes to the President, who is expected to sign it into law.