Washington, D.C. – Starting July 1, interest rates on subsidized college student loans will fall to 3.4 percent thanks to the 2007 College Cost Reduction and Access Act, enacted by a Democratic-led Congress. Congressional Progressive Caucus co-chair Rep. Raúl M. Grijalva, who voted for the measure, called it “a major equalizer in higher education access” and pointed out that a typical student borrower who started college in 2008 will have saved $2,570 over the life of their loan thanks to the law.
Millions of students take out subsidized student loans each year. Under the 2007 measure, the interest rate on subsidized student loans has been cut as follows:
Grijalva said making college more affordable “is one of the most important things we can do to invest in our nation’s future and build a stronger middle class. We won’t have good jobs and a stronger economy unless the American people have the skills and training they need to work in those jobs. This is part of the Democratic agenda to make college more affordable and accessible for millions of American students, and it couldn’t come at a better time.”
Also on July 1, thanks to the 2008 Higher Education Opportunity Act, new college affordability information will become available to young people and their families on the Department of Education Web site, including early estimates of expected college costs at the individual colleges or universities that interest them. The site will also carry information on incentives for attendance, such as need-based aid, that individual colleges and universities may be offering.
The Democratic-controlled Congress, between 2007 and 2010, took numerous other steps to make college more affordable, including:
· Increasing Maximum Pell Grant. Between 2007 and 2010, the Democratic-led Congress increased the maximum Pell Grant from $4,050 to $5,550 after Republican-led Congresses had frozen the maximum Pell Grant for four years. Currently, about 9 million students receive a Pell Grant to help pay for college. Click here for district-by-district information on the number of Pell Grant recipients and the total Pell Grant aid provided in each congressional district, prepared by the Department of Education, for the 2011-2012 academic year.
· Income-Based Repayment Program. The Democratic-led Congress established the Income-Based Repayment Program, which began on July 1, 2009, to guarantee that borrowers will not have to pay more than 15 percent of their discretionary income in loan repayments.
· Public Service Loan Forgiveness. The Democratic-led Congress also established the Public Service Loan Forgiveness Program, which began on October 1, 2007, under which graduates who enter into public service careers – such as teachers, public defenders, firefighters, nurses, non-profit workers and more – are eligible for complete loan forgiveness after 10 years of qualifying public service and loan repayments.
“Making college available to every American who wants an education, regardless of their wealth or circumstances, is a goal worthy of every Congress,” Grijalva said. “These steps are beacons on the way to that goal, and I mean to push Congress to keep at it until we’re all the way there.”