Making College More Affordable

Senator Stabenow was proud to fight for the successful passage of the College Cost Reduction Act of 2007, which will help to reduce the cost of higher education and direct federal dollars to those areas where they are most needed to help students. Specifically, this new law:

• Increases student aid for low-income and middle-income students by $20 billion - the largest increase since the G.I. bill of 1944. Pell Grants will be increased by $500 next year, and up to $5,400 by 2012- an increase of more than 25 percent over the next five years. The law provides $676 million in new tuition grants for Michigan over the next five years - all without increasing government spending or raising taxes.
• Helps make student loan debt more manageable. The bill caps monthly payments for federal student loans at 15 percent of the borrower's discretionary income. It also cuts interest rates on new subsidized Stafford loans for undergraduates from 6.8% to 3.4% by 2011.
• Forgives student loan debt for those who commit to public service. The bill forgives the remaining balance of federal loans for students working for at least 10 years in public service careers such as social work, nursing, teaching, or law enforcement.
• Provides new grants for students who teach in high-need schools. The bill encourages high-achieving students to teach by offering scholarships of $4,000 per year for students who commit to teaching high-need subjects in high-need schools.
• Helps students prepare for college. The bill increases funding for the successful Upward Bound program, to help disadvantaged students prepare, apply to, and succeed in college.
• Reforms the student loan system so it works for students. The bill reduces excessive lender subsidies and redirects that money to students. This legislation does not raise taxes or increase government spending - it pays for all the new grants and loans by reducing these subsidies and spending that money where it is needed most.

Education policy is economic policy -- in Michigan especially, our colleges and universities provide a path to a successful future for our children, and help to fuel our economy. For more information, students and families should contact their college's financial aid office.