Letter from Klein on College Cost Reduction and Access Act
As South Florida families know all too well, the cost of college has skyrocketed in recent years. The average student now graduates with over $22,000 in total student debt, and many families face debts of tens of thousands, or even a hundred thousand dollars. Given our current economic downturn, it is more important than ever that we help bring student loan bills under control and provide every American, regardless of their family’s income, an equal shot at a college education.
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Lower interest rates on need-based federal student loans. On July 1, the interest rates on subsidized federal student loans will decrease, and they will continue to drop each year until they reach 3.4 percent in 2011.
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Reasonable and affordable monthly college loan payments for borrowers. On July 1, a new Income-Based Repayment program will go into effect that caps borrowers’ monthly loan payments at 15 percent of their discretionary income. Any current or future borrower whose loan payment exceeds 15 percent of their discretionary income is eligible. After paying on time every month for 25 years, borrowers will have the opportunity to have some debt forgiven due to their responsible repayment.
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Higher Pell Grant scholarships that cover the average tuition at public universities. Due to funding provided by both the College Cost Reduction and Access Act and the American Recovery and Reinvestment Act, the maximum Pell Grant scholarship for the 2009-2010 school year will be $5,350 – more than $600 above last year’s award.
In addition, students and borrowers will be able to continue to take advantage of other new programs that will make it easier for graduates to go into public service fields without being buried by student loan debt. To encourage more students to become teachers, up-front tuition assistance in the form of TEACH Grants provides up to $4,000 a year – for a maximum of $16,000 – to students who commit to teaching high need subject areas in high need schools for four years after graduation.
As the father of two college-aged children, I have seen how quickly the cost of college has risen in recent years. I believe strongly that every American who wants to work hard and earn a degree should have the opportunity to do so. By improving access to higher education, we can ensure that our next generation of leaders is prepared to compete and succeed.
Warmest Regards,
Ron Klein
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