Baucus, Tester pave way for more affordable higher education
Senators pass measure increasing Pell Grants, lowering interest rates
(WASHINGTON, D.C.) – Going to college will be more affordable for Montana's working families, thanks to a measure that cleared the Senate today with the support of Senators Max Baucus and Jon Tester.
The College Cost Reduction and Access Act overwhelmingly passed the Senate this morning with a vote of 79 to 12.
Baucus and Tester threw their support for the measure noting that in Montana, 70% of graduates leave college with debt. The average graduate owes more than $17,000.
The Act provides more than $20 billion in new student aid and benefits to American college students. It's the largest increase in federal student aid funding since the G.I. Bill went into effect after World War II.
The College Cost Reduction and Access Act:
- Increases the maximum Pell Grant from $4,800 to $5,400 by 2012. The Act sets aside more than $75 million for Pell Grants in Montana over the next five years. When passed, Pell Grants will go up an average of $480 for the more than 17,000 Montana students who rely on Pell Grants.
- Halves the interest rate on subsidized student loans from 6.8% to 3.4% for undergraduate students with subsidizes loans.
- Simplifies the federal financial aid process for students by phasing out the complicated, 7-page FAFSA application form and replacing it with an easier, 2-page form.
- Provides loan forgiveness for students who spend ten years in public service, including military service.
- Establishes TEACH Grants, which provide $4,000 per year for undergraduate students who commit to teaching in high-need school districts.
- Reforms the student loan system by shifting unnecessary lender subsidies to student aid programs.
- Invests in schools that serve minority students.
"This legislation really cleans up the financial aid industry, making it work for the students who need it," Baucus said. "This bill is about making higher education more accessible and more affordable for all Americans. The more Montanans who have a chance at going to college, the better off our state will be. It's good for jobs and our future."
Both senators noted that the cost of attending a four-year college in Montana has increased 40% between 2000 and 2006. But during that same time the median household income in Montana has increased only 14%.
"More affordable higher education is something I pushed hard for before I came to Washington, and one I'll keep pushing in the years to come," Tester said. "All Montanans—regardless of income—deserve a shot at going to college. This measure does just that by making higher education more accessible for working families."
The College Cost Reduction and Access Act has already been approved by the U.S. House and now goes to President Bush to sign into law.