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With the cost of a college education on the rise, the U.S. government is stepping in to make education more affordable. On September 27, 2007, the President signed into law the “College Cost Reduction and Access Act.”
According to the U.S. House of Representatives Committee on Education and Labor, this act “will provide the single largest increase in college aid since the GI Bill. And it will do so at no new cost to taxpayers.” This will be accomplished by cutting excess subsidies the federal government pays to student loan companies by $20 billion.
 The College Cost Reduction and Access Act has several goals:
- Making college more affordable.
- Increasing financial aid.
- Encouraging public service and teaching.
Making College More Affordable
According to the U.S. House of Representatives Committee on Education and Labor, the College Cost Reduction and Access Act makes college more affordable by:
- Cutting interest rates in half on subsidized student loans over the next four years. This could save the average student $4,400 over the life of the loan.
- Guaranteeing that borrowers will not have to pay more than 15% of their discretionary income on loan payments.
- Allowing borrowers to have their loan forgiven after 25 years.
Increasing Financial Aid
Passage of the College Cost Reduction and Access Act means more assistance for students. Students will benefit by:
- The increase in the maximum Pell Grant scholarship to $5,400 over the next 5 years. Pell Grant scholarships will receive an overall increase of nearly $12 billion dollars.
- Easing the burden on undergraduate student borrowers by cutting student loan interest rates in half to 3.4%.
- Income protection allowances for working students that enable students to shelter more of their income from the financial aid process.
- An additional $500 million investment in colleges and universities that historically serve minorities.
Encouraging Public Service and Teaching
The College Cost Reduction and Access Act benefits our workforce and economy. Public service and teaching are rewarded by:
- Providing upfront tuition assistance of $4,000 per year to students who pursue careers as public school teachers and commit to teaching in high-poverty communities or high-need areas for 4 years.
- Providing loan forgiveness after 10 years in public service by those who work as military service members, first responders, law enforcement officers, firefighters, nurses, public defenders, early childhood educators, social workers, or child care providers.
For More Information
Contact Federal Student Aid Information Center (FSAIC) by calling 800-4-FED-AID (800-433-3243) or by visiting their website at: www.studentaid.ed.gov
Contact the Ohio Board of Regents by calling 614-466-6000 or by visiting their website at: http://regents.ohio.gov/index.php
For more information, please visit www.ohiotreasurer.gov or call us at 1-800-228-1102. |
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