Chris Van Hollen on the new education law:
“Every year, some 200,000 students do not go to college in America solely because they cannot afford the cost. Help is on the way.
“Last week, the 110th Congress fulfilled its election-year promise and sent to the President’s desk legislation that will help millions of students and families pay for college by reducing the cost of student loans and increasing Pell grants. This was done at no new cost to the taxpayer by reducing subsidies to banks and other lenders. I was proud to be a co-sponsor of this vital bill, which the President signed today.
“This new investment in college financial assistance is critically important. In today’s economy, a college education is as important as a high school diploma was a generation ago. Yet college costs have grown nearly 40 percent in the last 5 years and the federal investment in education has not met the need. From 2001 to 2006, the maximum Pell grant increased by only $300, or 8 percent - frozen by the Republican-led Congress at just $4,050 for the last four years. As a result, students and their families have had to take out more loans, accumulated more debt, and, in many cases, forgo a college education altogether because the costs are too great.
“This new law will increase the maximum Pell grant by $490 in just one year, and by $1,090 over the next 5 years. This will restore the purchasing power of the Pell grant and make it easier for the 5.5 million students who receive these grants to afford college. The bill will also cut the interest rates in half on new need-based federal student loans, from 6.8 percent to 3.4 percent over the next four years, slowing the accumulation of debt and saving the typical student borrower – with $13,800 in need-based student loan debt - $4,400 over the life of the loan. And as students repay, they will never have to spend more than 15 percent of their yearly discretionary income on loan payments. Young people should not have to choose between paying their rent and paying off their loans.
“The new law will also provide assistance to those who choose critical jobs in public service by offering loan forgiveness after 10 years of service to military service members, first responders, law enforcement officers, firefighters, nurses, public defenders, prosecutors, early childhood educators, librarians, and others. It encourages young people to become teachers by providing up-front tuition assistance for undergraduate students who commit to teaching in high-poverty communities or high-need subject areas.
“My constituents in Maryland – where almost 50,000 students take out need-based loans to attend public colleges and on average graduate with over $14,000 in debt - will see tangible results from this law. Over the next 5 years, Maryland students, including the nearly 70,000 who receive Pell grants, will receive over $370 million in loans and assistance.
“Today, we’re going to help open the door to college to ensure the best possible future for our young people. We’re going to harness the ability and ambition of our best and brightest and encourage them to enter public service. And we’re going to help students afford advanced degrees, so the United States will remain on the forefront of innovation and discovery in a competitive global economy. We made that promise to the American people last November, and today we are seeing it through.”