Student Aid and Fiscal Responsibility Act of 2009

hmoroz — Mon, 03 Aug 2009 10:48:02 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Estimated savings from the Student Aid and Fiscal Responsibility Act’s termination of federal subsidies to private student lenders: $86.8 billion

Average total student loan debt for 2006-2007 bachelor’s degree recipients: $22,700

Maximum Pell Grant in 2009: $5,350

Maximum Pell Grant in 2019, under the Student Aid and Fiscal Responsibility Act: $6,900

Estimated number of students who will receive aid through the Pell Grant Program in 2009-2010: 7 million

Percentage of Pell Grant recipients whose parents’ income was below $40,000 in 2007-2008: 83

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. Although a college education is increasingly a prerequisite for a middle-class standard of living, current and aspiring middle-class students and their families are struggling more than ever to afford college. A massive $87 billion subsidy to private companies that make student loans did little to promote affordability. It makes sense for the federal government to eliminate this waste by expanding its Direct Loan program, which is already serving as an effective lender for an increasing number of students as the credit crisis continues to threaten the market for private student loans.

Now the money can be redirected to genuinely help Americans afford college. Approximately $40 billion would increase the maximum Pell Grant, the most widely used college assistance program that helps lower-income students attend college. In recent years, the program has failed to keep pace with the rising cost of college: thirty years ago the maximum Pell Grant covered 77 percent of the cost of attending the average four-year public school, but today it covers only 35 percent. Increasing the maximum award would restore some of this lost purchasing power, providing more students from lower-income families with an opportunity to attend college. The bill’s provision for automatic Pell Grant increases helps ensure that the Pell Grant permanently maintains its value. Caps on interest rates and a reworked fixed interest-rate program will not only make college more affordable for all students, but will make obtaining and keeping a middle-class standard of living easier by reducing the growth of student loan debt, which now averages almost $23,000 for bachelor’s degree recipients, and reducing student loan defaults. An increased debt load can make it difficult for young graduates to make ends meet, much less begin saving or pursue careers in teaching and public service.

Funds for a variety of initiatives to increase access to early-childhood education and graduation rates, to modernize schools, and to improve community colleges will expand the opportunity for students to succeed at all levels of education.

Quotes from Experts

Beyond this Bill

Additional Resources

“Window of Opportunity: Targeting Federal Grant Aid to Students with the Lowest Incomes,” from the Institute for Higher Education Policy

“Trends In Student Aid,” from the College Board

“Student Aid on the Web,” from the U.S. Department of Education

Ensuring Continued Access to Student Loans Act of 2008

hmoroz — Thu, 24 Apr 2008 15:36:42 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Minimum number of student lenders in the Federal Family Education Loan Program: 2,000

Percentage growth in undergraduate federal borrowing between 1996-1997 and 2006-2007 school years: 51

Percentage increase in the number of undergraduate subsidized Stafford loan borrowers between the 1996-1997 and 2006-2007 school years who do not have to pay interest on their loans while attending school: 47

Percentage increase in the number of undergraduate unsubsidized Stafford loan borrowers between the 1996-1997 and 2006-2007 school years who must pay interest on their loans while attending school: 113

Percentage of total funds used to finance postsecondary education composed by private loans in the 1996-1997 school year: 3

Percentage of total funds used to finance postsecondary education composed by private loans in the 2006-2007 school year: 12

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. With 66% of students at four-year colleges holding student loan debt, the credit crunch has generated concerns that aspiring middle-class and middle-class college students and their parents will be unable to obtain the loans they rely on to afford college. Federally backed student loans, which are cheaper than private student loans, provide these students with a financial gateway to higher education. Increasing the amount of Stafford loans that students are able to borrow would help students cope with tuition costs that they would otherwise have to fund with more expensive private loans. The delay in PLUS loan repayment authorized by the bill, along with the exemptions for delinquency on mortgage and medical bill payment, recognize that the declining economy in general, and the collapsing housing market and rising health care costs in particular, are squeezing many middle-class American families. In conjunction with the act’s other provisions, the authorizations of funding for lenders-of-last-resort and for purchases of student loans by the government minimizes the risk that the marketplace for federally backed student loans will collapse.

Quotes from Experts

Beyond this Bill

Additional Resources

Trends in Student Aid, from College Board

"House Panel Addresses the Would-Be Student Loan Crisis", from Inside Higher Education

Student Aid on the Web, from the Department of Education

Community college

Student Aid and Fiscal Responsibility Act of 2009

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Ensuring Continued Access to Student Loans Act of 2008

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources