Washington, DC – Today, Congressman John Sarbanes supported and the House of Representatives passed the Student Aid and Fiscal Responsibility Act (SAFRA) H.R. 3221, which seeks to expand access to an affordable college education to more students, transform early education opportunities and build a world-class community college system. The legislation has been referred to the Senate for further consideration.
Over the next 10 years, the bill will increase the maximum annual Pell Grant scholarship from $5,350 to $5,550 in 2010 and to $6,900 by 2019. In the 2010 – 2011 academic year 13,499 students in the 3rd District will be eligible for a Pell Grant award. SAFRA strengthens the Pell Grant program by eliminating wasteful federal subsidies to private lenders and reinvesting those funds in the Pell Grants.
“Strengthening the Pell Grant program will make college dreams a reality for millions of hardworking young Americans who might not otherwise have the means to attend,” said Congressman John Sarbanes. “Expanding access to higher education will strengthen our economy in the future and make our workers and businesses more competitive in the global economy.”
In addition to expanding the Pell Grant program, SAFRA bolsters the federal Direct Loan Program, which will ensure that students have access to loans even in an economic downturn; provide stable interest rates throughout the loan repayment process; and simplify the application and repayment process.
Other College Loan Reform Specifics:
· Invests $3 billion nationally to bolster college access and completion support programs for students. It will increase funding for the College Access Challenge Grant program, resulting in at least $1.5 million a year for the next five years in Maryland, and will also fund innovative programs in states and at institutions that focus on increasing financial literacy and helping retain and graduate students.
· Strengthens and expands the Perkins Loan program, a campus-based program that provides low-cost federal loans to students, by providing the program with more reliable and stable funding from the federal government and expanding the program to include significantly more college campuses.
· Keeps interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012. In 2008, students in Maryland borrowed 103,249 subsidized student loans.
· Makes it easier for families to apply for financial aid by simplifying the FAFSA form and allowing students and families to apply for aid using the information on their tax returns.
· Invests $2.55 billion nationally in Historically Black Colleges and Universities and Minority-Serving Institutions to provide students with the support they need to stay in school and graduate.