What's New
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Samantha O’Leary, a student volunteer with MASSPIRG from UMass
Lowell
speaks at a pre-vote rally on March 25 while Education Chairman Harkin
and Senator Stabenow look on. |
Student Aid Reform: On March 25th, Congress voted to make
historic investments in financial
aid by ending sweetheart deals with big banks and lenders. The passage
of H. R. 4872, the
Health Care and Education Affordability
Reconciliation Act, is a game-changing bill that will finally give
breathing room to students drowning in debt.
CLICK
HERE to see the
student activism from across the country that helped build support for
this bill.
The money saved from cutting lender subsidies constitutes the largest
single investment into the Pell Grant program our country has ever seen.
This $36 billion investment increases Pell Grant funding at a time when
tens of millions of students are making tough college financing choices
that could mean dropping out of college. The bill also expands the
Income Based Repayment program which will allow over one million
additional students the ability to manage their debt load after
graduation.
Among other things, the bill reinvigorates the Pell Grant program, which provides need-based
aid to over seven million college students, raising the Pell Grant
maximum to $5,975 by 2017 for students who need it, and guaranteeing
that the grant amount will increase thereafter on a yearly basis by the
cost of living after 2013.
Overview
Society relies on our colleges to solve our social problems,
graduating skilled people to become teachers, social workers, doctors,
entrepreneurs and innovators who can improve our collective quality of
life. We also rely on college to offer opportunities to students from
all socioeconomic backgrounds, acting as a force of fairness and
equality.
To maintain this role, our Higher Education Project seeks to make student loan programs more affordable and efficient.
These
days, college is practically a necessity. But as states cut budgets,
and grant aid has diminished, students are relying on loans to pay for
college. Today, the average student borrows almost $20,000 in student
loans to pay for college. In addition, nearly one-third of all
students work more than 35 hours a week to pay for college, hindering
their academic progress.
To lower student debt, Congress passed a landmark piece of legislation in October 2007
that decreases student loan interest rates and creates new loan
repayment programs designed to ease the repayment burden after
graduation.
But more and more students are moving beyond financial aid to
finance their degrees with private student loans. Private loans are
much riskier, bringing applicants in with low advertised interest rates
but spitting them out with higher interest rates and record debt levels.
Worse, loan pricing targets lower income students with higher
interest rates and penalty fees. As a result, students with need based
grants are graduating with the most debt, and debt with higher
interest.
Our project is working to protect students as consumers against the
banks, make federal loans for parents more competitive toward private
student loans, and give students more flexibility within the federal
loan programs when their circumstances change, so they don’t need to
turn toward banks for college financing.
