Pace Paw Print

Media Credit: Charles Dharapak (google.com) President Bush speaks before signing H.R. 2669, the College Cost Reduction and Access Act, Thursday, Sept. 27, 2007.

President Bush signed a much anticipated bill from Congress late last month that will reduce the burden of college loans for thousands of students throughout the country.

The College Cost Reduction Act, officially signed by Bush on Sept. 27, among other things, will cut subsides, or aid, to lenders such as banks, who participate in the federal student loan program. The savings this provides to the federal government will be used to boost Pell Grants, cut the interest rate on student loans, and expand repayment options for students.

"With tuition rates that have been escalating for too long and at too high a rate for many students and their families, this is an extremely important step in the right direction," said President Friedman in a Letter to the Editor in the Oct. 3 edition of the Paw Print.

The bill increased the amount of money granted by the federal government for Pell Grants to $2,030,000,000 in 2008. The amount will continue to increase through 2017. The increased funding toward Pell Grants has enabled the government to increase the maximum amount of Pell Grants available to each student from $4,310 to $5,400.

The savings also allow the interest rates on subsidized Stafford loans for undergraduate students to be cut in half over four years; the rate going from 6.8% in July 2008 to 3.4% in July 2012.

Another section indicates that the government will eliminate the balance of any interest and principal due on any Federal Direct Loan after ten years for borrowers who are on an income contingent repayment or standard repayment plan based on a ten year repayment schedule. It also applies to those students who have been employed in a public service profession within ten years.

A public service job is defined in the bill as a full-time job in emergency management, government, military service, public safety, law enforcement, public health, public education, social work, public interest law services, child care, public library sciences, or any other job at an organization that is described in section 501(C)(3) of the Internal Revenue Code of 1986.

The bill was passed through Congress on Sept. 7 with a large margin. It received 79 out of 100 votes in the Senate and 292 out of 431 votes in the House of Representatives.

Before sending the bill for the President's approval, Speaker of the House, Nancy Pelosi, said the bill "will break down the financial barriers that prevent too many students from pursuing higher education."

A small ceremony was held at the White House before the President signed the bill.

"Pell Grants send an important message to students in need," said Bush. "If you work hard and you stay in school and you make the right choices, the federal government is going to stand with you."

To give an example of how the bill would affect Pace students, President Friedman said in his letter that as of June of last year, 2,043 Pace students received approximately $5.5 million in Pell Grants. If this bill had applied to these figures, the amount received in Pell Grants could have been increased by two million dollars.

"Not enough, but critically important" said Friedman. "We all benefit from the economic growth and innovation that comes with more well-educated Americans."

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