The House of Representatives passed legislation that will make the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college – and doing so at no new cost to U.S. taxpayers.

The legislation - the College Cost Reduction Act of 2007 (H.R. 2669) - which Congressman Cuellar advocated for and voted in favor, will boost college financial aid by about $18 billion over the next five years. The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry by $19 billion. It also includes nearly $1 billion in federal budget deficit reduction.

“As a strong proponent of education, I voted in favor of this bill because it is critical in making sure that all students have access to a post-high school education,” said Congressman Cuellar. “This bill will also make a landmark investment of $500 million in minority-serving institutions over five years.”

Under the legislation, the maximum value of the Pell Grant scholarship will increase by $500 over the next five years. When combined with other Pell scholarship increases passed or proposed by Congress this year, the maximum Pell Grant will reach $4,900 in 2008 and $5,200 in 2011, up from $4,050 in 2006, thus restoring the Pell’s purchasing power. About 6 million low- and moderate-income students would benefit from this increase.

“We will see an average savings of $4,550 in interest per student over the life of the loan at a 4-year school in Texas,” Congressman Cuellar noted.

On average, the typical student at a four-year public school of higher learning in Texas leaves with a debt of $14,233.

The legislation would cut interest rates in half on need-based student loans, reducing the cost of those loans for millions of student borrowers. Like legislation passed by the House earlier this year, the College Cost Reduction Act would cut interest rates from 6.8 percent to 3.4 percent in equal steps over the next five years. About 6.8 million students take out need-based loans each year, with approximately 205,508 coming from Texas.

The College Cost Reduction Act includes a number of other provisions that will ease the financial burden imposed on students and families by the cost of college, including:

o Tuition assistance for excellent undergraduate students who agree to teach in the nation’s public schools;
o Loan forgiveness for college graduates that go into public service professions;
o Increased federal loan limits so that students won’t have to rely as heavily on costlier private loans;
o New tuition cost containment strategies; and
o Landmark investments in Historically Black Colleges and Universities, Hispanic Serving Institutions and minority serving institutions.

A broad coalition of student advocacy groups and labor organizations support the College Cost Reduction Act.

Congressman Henry Cuellar is a member of the House Homeland Security, Small Business, and Agriculture Committees in the 110th Congress; accessibility to constituents, education, health care, economic development and national security are his priorities. Congressman Cuellar is also a Senior Whip.
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