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September 27th, 2007
Landmark College Aid Expansion Bill Signed into Law

WASHINGTON, D.C. – Today, landmark legislation was signed into law to help millions of students and their families pay for college, with no new cost to U.S. taxpayers.

The College Cost Reduction and Access Act is the single largest investment in college financial assistance since the GI Bill in 1944. And it will take effect at no new cost to taxpayers by cutting excess subsidies paid by the federal government to lenders in the student loan industry.

The legislation saves college students an average of $4,400 on student loan interest, increases Pell Grant amounts, and forgives loans for those who provide 10 years of public service.

Rep. Raúl M. Grijalva, a member of the Education and Labor Committee, worked to include language in the base bill from previous Congresses. Specifically, Grijalva was able to include loan forgiveness for librarians, first responders, and bilingual educators in high need areas. In addition, he worked to ensure an increased investment in minority service institutions.

“This new investment in college financial aid is critical,” said Rep. Grijalva. “College costs have grown nearly 40 percent in the last five years. Students are graduating from college with more debt than ever before. The College Cost Reduction and Access Act ensures that college is affordable, accessible and makes an historic investment in America’s students, its economic competitiveness, and its future.”

The legislation would boost college financial aid by more than $20 billion over the next five years. The bill reduces excessive federal subsidies paid to lenders in the college loan industry by $20.9 billion. It also includes $750 million in federal budget deficit reduction. The legislation increases the maximum Pell Grant to $5,400 by 2012 and includes over $500 million for the Perkins Loan Program. In Arizona, this means that the 212,968 student recipients will see a $490 increase in their maximum Pell Grant scholarship next year and that at least 33,000 students will save over $4,730 in interest for their loans.

The College Cost Reduction and Access Act include a number of other provisions that will ease the financial burden imposed on students and families imposed 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;
  • Landmark investments in Historically Black Colleges and Universities, Hispanic Serving Institutions and $60 million to Tribal Colleges and Universities; and
  • $228 million for Upward Bound, a program that helps prepare low-income, first generation students for college.
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