College Aid: An Extraordinary Investment in Our Future
By Representative Mike Michaud
Taking standardized tests, meetings with school councilors, attending college fairs, and visiting schools are familiar activities to many students in their junior year of high school. It’s a time when many students begin their college searches and consider what to do after high school. It should be an exciting time for students and parents. Unfortunately, for too many Maine families, it can also be a time filled with worries about how to afford a college education.
We all want our nation’s young men and women to have access to the best education. Every student deserves the right to pursue his or her highest aspirations. However, a lack of financial resources continues to prevent too many highly qualified students in our state from attending college.
And it’s no wonder the cost of higher education is so daunting. Taking inflation into account, tuition at four-year public colleges has grown by 35 percent in the last five years. This means that students and families are taking on increasing amounts of debt to pay for college, and those prospective students are getting a good dose of sticker shock. The sad reality is that each year, nearly 200,000 students in our country are holding off on going to college, or skipping it altogether, because they can’t afford it.
This is simply wrong, and it’s long past time that we do something about it.
Recognizing that these costs are a major burden for most families, the House of Representatives passed a bill on July 11 that will help our nation’s students and families afford higher education. Called the College Cost Reduction Act, the legislation makes the single largest investment in college financial aid since the 1944 GI Bill which opened the doors to college for a generation of soldiers returning from World War II.
The College Cost Reduction Act would boost college financial aid by approximately $18 billion over the next five years. The legislation pays for itself by reducing federal subsidies paid to lenders in the college loan industry by $19 billion. The bill also includes nearly $1 billion in federal budget deficit reduction.
The bill would cut interest rates in half on need-based student loans. 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. In Maine, about 21,000 students take out need-based loans each year so that they can attend a four-year public school. The interest-rate changes that this bill makes could potentially save each of these students $4,210 over the life of their loan.
The College Cost Reduction Act also increases the maximum value of the Pell Grant scholarship. When combined with other Pell scholarship increases passed or proposed by Congress this year, the maximum Pell Grant would climb from $4,050 in 2006 to $4,900 in 2008 and $5,200 in 2011. This would restore the Pell’s purchasing power and help about six million low- and moderate-income students.
The legislation would also help to keep 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 income on loan repayments and by allowing borrowers in economic hardship to have their loans forgiven after 20 years.
All combined, this is a tremendous, historic step toward realizing the goal of making college affordable for every qualified student in the country. With this bill, we are saying that no one should be denied the opportunity to go to college because of the cost.
Rep Tom Allen also backed this measure.