Rep. Gene Green Supports America’s Future through Student Aid Reform
April 12, 2010
Washington, D.C. – Rep. Gene Green, with the passage of the Health Care and Education Reconciliation Act, continued to support young Americans and students. The law is the largest investment in student aid in history, while also working to reduce the deficit. It strengthens the Pell Grant program, invests in community colleges, extends support for historically black colleges and minority serving institutions, and helps student borrowers manage their student loan debt.
“In an increasingly competitive economy, higher education is the key to unlocking opportunity and securing higher paying jobs,” Rep. Green said. “An educated workforce is a productive workforce.”
By 2017, with an investment of more than $40 billion, the maximum Pell Grant award is expected to be $5,975. The value of the grant had been shrinking; in 1977 it paid 75% of college costs and only 33% on 2009. The 29th District of Texas will receive nearly $65 million and nearly $2.5 billion for the State of Texas over 10 years for the Pell Grant investment. Student loan repayments will be made more affordable by allowing new borrowers starting in 2014 to cap student loan payments at 10% of discretionary income, down from 15%, and balances will be forgiven after 20 years, down from 25 years.
In addition, all school loans will be switched to the Direct Loan program, directing the money to the students instead of diverting through banks and paying subsidies. This change will save the government $61 billion over the next 10 years. Students will also benefit from lowered interest rates on Stafford, need-based, loans from 4.5% in the 2010-2011 school year to 3.4% on the 2011-2012 school year.
“Many students in our district are dependent on federal assistance to allow them the chance to complete their education,” Rep. Green continued. “With education costs continuing to rise, it was essential for student aid reform to assist them in loan repayment so that student loan debt doesn’t limit prospects after graduation.”
Community colleges will receive $500 million a year for the next four years, giving all students access to high-quality, low-cost higher education. Additionally, a $3 billion investment in historically black colleges and minority-serving institutions will restore and expand programs that give students the support they require to stay in school and complete their education. Texas alone will receive over $307 million. The law also encourages students to go into teaching by providing tuition assistance and loan forgiveness.