Larsen Votes for Largest Increase in College Aid Investment in 63 Years</A

Jul 11, 2007

Washington, D.C. - U.S. Representative Rick Larsen (WA-02) today voted to approve legislation to make the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students pay for college at no new cost to U.S. taxpayers.  The College Cost Reduction Act of 2007 (H.R. 2669), which passed the House passed by a vote of 273-149, would boost college financial aid by approximately $18 billion over the next five years. The legislation pays for itself by reducing federal subsidies paid to lenders in the college loan industry by $19 billion. The Senate is expected to vote on similar legislation this month.

“Washington students and families have been staggering under the enormous weight of tuition costs and loan repayments,” said Larsen. “This bill would finally give them the relief they need, increasing aid to Washington students by $234 million over five years to help more Washingtonians afford a college education without going dangerously into debt.”

Under the legislation, the maximum value of the Pell Grant scholarship would increase by $500 over the next five years. When combined with other Pell scholarship increases passed or proposed by Congress this year, the maximum Pell Grant would reach $4,900 in 2008 and $5,200 in 2011, up from $4,050 in 2006. About 6 million low and middle-income students would benefit from this increase, including 97,965 students in Washington state.

The legislation would cut interest rates in half on need-based student loans, reducing the cost of those loans for millions of student borrowers. The College Cost Reduction Act would cut interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years. Once fully phased-in, this would save the typical student borrower $4,400 over the life of the loan. About 6.8 million students take out need-based loans each year, including 47,631 students in Washington state alone.

The College Cost Reduction Act includes a number of other provisions that would ease the financial burden on students and families, including:

Tuition assistance for excellent undergraduate students who agree to teach in the nation’s public schools
Loan forgiveness for college graduates that go into public service professions
Increased federal loan limits so that students won’t have to rely as heavily on costlier private loans