Congress on Sept. 7 passed the College Cost Reduction and Access Act of 2007, which increases Pell Grants by nearly $12 billion over four years, lifting the amount of the maximum award to $5,400 by 2012. The bill passed 79-12 in the Senate and 292-97 in the House, and President Bush has said he will sign the bill into law.

The act cuts the interest rate for student loans in half, from 6.8 percent to 3.4 percent, and includes innovative loan-forgiveness provisions for public service employees such as those in public health and public education—including early childhood education. The bill also cuts waste by eliminating more than $20 billion in taxpayer-funded subsidies for lenders like NelNet and Sallie Mae.

The bill "puts the emphasis back on helping students attend college, not on subsidizing private banks," said AFT president Edward J. McElroy in a statement. "For too long, lenders have profited at the expense of the very people they were supposed to help."

Lenders lobbied furiously to block the interest rate changes and other "special allowance payment" reductions that add to their profits. But this time they were no match for the voices of people like those the AFT represents and serves, who have been seeking relief for years from the escalating costs of college.

"The bill helps make college a reality for low- and middle-income students by providing more needs-based aid and making student loans more affordable," said McElroy. He applauded the efforts of the two Democratic chairs of the Senate and House education committees, Sen. Edward Kennedy (Mass.) and Rep. George Miller (Calif.).

Next on the higher education docket for Congress is reauthorization of the Higher Education Act, several years overdue. The Senate passed its version of the act this summer and the House is expected to produce its bill soon. (AFT’s support of the bill is prominently displayed on the House Committee on Education and Labor Web site.) [Barbara McKenna, AFT press release]

September 7, 2007