| For immediate release June 30, 2009 |
Contact: Erin Donar
202-225-3611
|
|||
| Kildee Praises New College Affordability Benefits That Go Into Effect July 1 |
||||
| Changes Come as the President Moves to Simplify Student Loan Applications | ||||
| Washington, D.C. – On July 1, 2009, new college affordability benefits will go into effect to help students and recent grads deal with the cost of college. Additionally, the President recently announced that he and U.S. Education Secretary Arne Duncan will work to simplify the student loan application form, known as the FAFSA. Congressman Dale E. Kildee (D-MI), Chairman of the Subcommittee on Early Childhood, Elementary and Secondary Education, has fought tirelessly throughout his career to make higher education more affordable and accessible for students in Michigan and across the country. As education and economic opportunity go hand in hand, the Congressman praised these changes as an important way to move our country forward. “Education has long been the foundation of our country and is critical for the collective success of our nation. These new college affordability benefits will help make the dream of advanced education more affordable for millions of Americans across the country,” said Congressman Kildee. “By encouraging students to pursue education and making it easier and more affordable for them to do so, we are not only benefiting these students, we are ensuring that America’s workforce can compete in the global economy.” Starting July 1, 2009, the following benefits will go into effect: • Lower Interest Rates on Need-Based Federal Student Loans: Students will see the interest rates on their need-based federal student loans decrease from 6 percent to 5.6 percent. These rates will continue to drop until they reach 3.4 percent in 2011. • Reasonable Monthly Student Loan Payments: For students who qualify – generally students with high student loan debt or low-paying jobs – the new Income-Based Repayment program will cap monthly loan payments at levels that are more manageable. Many borrowers are currently spending large percentages of their monthly paychecks on student loan debt, a problem that will likely continue to get worse in today’s difficult economic climate. This new program will allow recent graduates to continue making their student loan payments at levels they can afford. • Higher Pell Grant Scholarships: The maximum Pell Grant Scholarship for the 2009-2010 school year will increase by $600 from last year. The new maximum will be $5,350. These changes were established under the College Cost Reduction and Access Act, which was enacted in 2007. This legislation provided an additional $20 billion in federal student aid at no additional cost to taxpayers. Students and borrowers will be able to continue to take advantage of other recent programs enacted under the law to encourage graduates to go into public service fields. The law provides up-front tuition assistance, known as TEACH Grants, of $4,000 a year – for a maximum of $16,000 – to students who commit to teaching high need subject areas in high need schools for four years after graduation. These changes are in addition to efforts that Congress has already undertaken to make student aid applications more streamlined. The Higher Education Opportunity Act, which was signed into law on August 14, 2008, included the below provisions. The President’s proposals will build on these efforts to simplify the student loan process. Streamlines the FAFSA Application Process • Encourages the U.S. Education Secretary to reduce the number of questions on the FAFSA form over the next five years. • Simplifies the FAFSA re-application process so that applicant can provide update information in subsequent years, rather than re-filing a new FAFSA form. • Enables the U.S. Department of Education and the Internal Revenue Service to work together to use information the government already has from applicants’ federal tax forms, such as income and asset information. Provides Families with Early Estimates of College Aid Packages • Allows students and families to enter information and receive estimates of their Expected Family Contribution as well as their estimated federal student aid packages in the years before they fill out the FAFSA. Creates an Easier Application Process for Low-Income Families • Creates a two-page “FAFSA-EZ” form for low-income students and families who qualify for the “auto-zero” family contribution. |
||||