The College Cost Reduction and Access Act, which will increase the amount of the Pell Grant, broaden loan forgiveness, decrease loan interest rates and develop an income-based repayment plan, was passed with support from Democrats and Republicans on Sept.,Government money that once went to loan companies will be spent on increasing aid to college students and graduates if the President signs a bill passed by Congress this month.
The College Cost Reduction and Access Act, which will increase the amount of the Pell Grant, broaden loan forgiveness, decrease loan interest rates and develop an income-based repayment plan, was passed with support from Democrats and Republicans on Sept. 7, congressmen and lobbyists said.
President George W. Bush has said he will soon sign the bill into law, according to Massachusetts Senator Edward Kennedy's office.
If authorized, the act will increase the maximum amount a student can receive in a need-based Pell Grant to $5,400 from $4,310, the current cap, by 2011. Collegeboard.com reported in 2005 that the Pell Grant covered 15 percent of the total published costs of attending a four-year private institution in the 2004-2005 academic year, down from 25 percent in 1985-1986.
By 2011, the interest rates of government-subsidized Stafford loans would be lowered to 3.4 percent from the current rate of 6.8 percent.
The bill would create an income-based repayment plan to help students pay back debt on a more reasonable schedule. Monthly payments would be capped at 15 percent of a graduate's income and are delayed for anyone making less than 150 percent of the poverty line.
According to the U.S. health department guidelines, an annual income of more than $15,315 would put a single person over that line.
The act will be funded in part by reducing the subsidies lenders receive and will funnel money directly to students.
Luke Swarthout, a higher education advocate for USPIRG, said the bill passed easily because it would save taxpayers' dollars by cutting excessive bank subsidies and funneling the same money into direct student loans.
"We're not cutting out the middleman entirely," he said. "But the middleman gets slightly less profit. It makes good fiscal sense and isn't it a better use of tax dollars to pay for college rather than subsidize banks?"
Aspiring drama teachers in Emerson's theater education program would also benefit from one provision of the act granting 10 years of loan forgiveness for teachers and others who move into civil service.
"[The lawmakers] keep saying that they want public school education to be better, but [as students] we have to spend tens of thousands of dollars to become teachers and it still takes over fifteen years to make that back as a public school teacher. I think this new program really helps students and the education system," said Courtney Wrenn, a freshman theater education major.
The average Emerson student graduates $34,668 in debt and is among the 21 percent of American graduates with over $30,000 of debt, according to Collegeboard.com.
Attending college has never cost more-at Emerson and around the country. Tuition at Emerson rose 6.4 percent this year to $26,880, the biggest jump in cost here in nine years and a reflection of a national trend of increased tuition, the Beacon reported on Sept. 13. In 2006, the average cost to attend a private four-year institution was $22,218, up from $18,950 in 2003, Collegeboard.com reported.
Kennedy, who has made college loans and financial aid a political priority, in a statement compared the act to the "GI Bill," which provided returning soldiers with significant college grants after World War II.
"It's shameful that low-income students--even those who have worked hard and done well in high school--are less likely to attend and complete college than high-income students . that's unacceptable," Kennedy said in the statement.
Junior broadcast journalism major Robin Lewis said she is increasingly worried about paying for her final year at Emerson, and may have to take out loans in order to graduate.
"I will no longer be able to cover another full year with what is left in my college fund, without some sort of financial assistance from Emerson, or a loan," she said in an e-mail interview. "The increasing cost of college has had a great effect on how much is left in my fund and how much aid I will need."