BY DANIEL STRAUSS
For the Daily
Published September 9, 2007
Congress passed a bill Friday increasing financial aid for college students.
The legislation, which is awaiting President Bush's signature, aims to overhaul federal student aid by cutting subsidies to student lenders by $21 billion and using that money to reduce costs for college students. About $11 billion of the $21 billion would go toward raising the maximum Pell Grant from $4,310 to $5,400 over the next five years.
Last year, 3,350 University students received Pell Grants, and 152,729 total students received them in the state of Michigan.
As states across the country cut funding for higher education and colleges increase tuition, many have expressed concern that college is becoming unaffordable. Supporters of the bill say it will counter that trend by reducing the burden of student loans on college graduates.
The Senate voted on and approved the bill Friday with a vote of 79-12. The House approved it later that day 292-97. While all Democrats voted for the bills, Republicans were split.
The bill would also cut interest rates for need-based student loans from 6.8 to 3.4 percent. In addition, the bill would cap the monthly amount any borrower earning less than one and a half times the poverty line can repay to 15 percent of the borrower's income.
It also says that graduates that go into occupations described as "areas of national need" wouldn't have to begin repaying those student loans for 10 years. That includes fields like emergency management, government, public safety and law enforcement.
President Bush has pledged to sign the bill.
This summer, Democrats in the House and the Senate introduced two different bills modifying financial aid in more extreme ways, but neither one passed.
President Bush opposed those measures, joined by some Republicans and student loan companies.
Democrats say the bill is important not only because it encourages higher education but also because it punishes the student loan industry for unethical practices.
Investigations by Congress and Andrew Cuomo, the attorney general of New York, have uncovered that some loan companies have offered gifts, cash and vacations to college administrators so colleges would steer students toward certain loan companies.
Sen. Debbie Stabenow (D-Mich.) said in a written statement that the bill is a victory for the state of Michigan.
"Increasing access to higher education will help keep Michigan's workforce competitive in the global market," Stabenow said. "In today's world, education policy is economic policy, and by making sure that more students can afford to go to college, we will help keep America on the cutting edge of innovation as we compete in a global economy."