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WASHINGTON, D.C. – As college costs continue to rise while wages across the country remain stagnant, Congressman Marion Berry along with other congressional leaders sent a historic college aid bill to the President for his signature today. This legislation, the College Cost Reduction and Access Act, makes college more affordable and provides the single largest investment in college financial assistance since the 1944 GI Bill – at no additional expense to taxpayers. The College Cost Reduction and Access Act passed with bipartisan majorities in both the House and Senate on September 7th, 2007.
"It is a disservice to give our young people a college education, while at the same time burdening them with so much debt that it requires decades to pay," said Berry. "For students, the increasing price tag of a college degree is standing in the way of opportunity and their chance for a better future. Education is the cornerstone to economic development and our nation's prosperity, which is why we must do everything in our power to invest in the future of our children."
The College Cost Reduction Act will increase financial aid by more than $20 billion over the next five years and cuts interest rates on subsidized loans in half over the next four years. Interest rates will decrease from 6.8 percent to 3.4 percent, saving the typical student borrower approximately $4,400. This legislation will also increase the maximum value of the Pell Grant scholarships by $1,090 over the next five years, reaching $5,400 by 2012, which would benefit close to 6 million low and moderate income students across the country.
In addition, the legislation will prevent students from facing unmanageable levels of federal debt by guaranteeing that borrowers will never have to spend more than 15 percent of their discretionary income on loan repayments and allow borrowers who are in economic hardship to have their loans forgiven after 25 years.
The bill is financed by reducing excessive federal subsidies paid to lenders in the college loan industry by $20.9 billion and also includes $750 for federal budget deficit reduction.
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