A new education act passed by Congress to help reduce the strain of paying for college has the support of the Massachusetts Student Public Interest Research Group.
On Friday, September 7, the College Cost Reduction and Access Act was passed by the U.S. Senate and House of Representatives. This act will provide additional aid to low-income students, as well as reduce the amount of debt students accumulate during school.
The act will now go to President Bush, who has already agreed to sign it into law.
UMass MASSPIRG Campus Organizer, Christopher Burns, calls this act “an excellent first step in making higher education more affordable.”
He commends the act on the increase in Pell Grant awards and the improved payment plan for low-income borrowers.
Though happy with the improvement, Burns insists that this is “just a first step” towards making higher education more accessible to everyone. SGA President Aaron Buford also lauded the congressional act as a step in the right direction for higher education.
“The bipartisan votes for this legislation and the President’s pledge to sign it into law are testament to the broad support for helping students and families pay for college,” he said in a statement.
The most notable change from previous years is the increase in the amount of money awarded through Pell Grants. The maximum amount, which currently rests at $4,310, will increase by $490 for the next two years, $690 for the following two years, and $1,090 for every year afterward. The new act also creates an income-based payment plan, which will allow low-income borrowers to make more reasonable payments. Under this new agreement, borrowers will be paying 15 percent of their income if it is 150 percent above the poverty line. Interest rates will also be reduced for low and middle-class borrowers receiving Stafford loans. According to Buford, “the bill trims excessive subsidies that benefit a handful of banks and directs them to millions of students and families who are working to pay for college.”
The new act will also finance an increase in spending for education. Lenders will receive a smaller rate of return for offering loans and a slightly smaller reinsurance rate from the federal government. These new rates will not affect taxpayers.
