The U.S. Senate passed a bill last Friday that lawmakers have deemed the most significant boost of federal aid to higher education since the G.I. bill of 1944 that allowed millions of veterans to attend college.
The bill would cut roughly $18 billion in federal subsidies to banks that produce government-backed loans to students while increasing Pell grants by $1,090. A required $700 million of the bill would go to aid the federal budget deficit.
The bill, which passed in a 78 to 18 vote, would put a cap on lenders limiting monthly payments to 15 percent of a loan-bearer's discretionary income.
Currently, students owe an average of nearly $20,000 upon graduation, which is a 65 percent increase to student debt over the past decade, according to the Project on Student Debt.
"College affordability has been an issue since the beginning of congress," Rep. Harry Mitchell, D-Ariz., said. "The fact is that everybody realizes the high cost of education and that we need to address this issue."
In a similar bill that was passed 273-149 by the U.S. House on July 11, Mitchell voted in favor of reducing student debt and cutting lender interest rates by 50 percent - a measure the Senate left out of their final proposal.
Although the two bills varied, both aimed at helping lower to middle class college students, Mitchell said, mainly by increasing Pell grants, which are awarded to the country's poorest students, from $4,310 to $5,400 by 2011.
A House and Senate committee is expected to come to a compromise on the conflictions of the bill by the fall.
If the bill becomes a law, students will notice the benefits from its implementation immediately, Mitchell said.
English senior Brandon Huseman said he has taken out student loans to help afford school. The interest rates on loans are so high that he said he feels like he is being victimized, but he was pleased to hear about the new cuts to his loan costs.
"This comes as great news because something like this will help me pursue what I want to do," Huseman said. "There's always more that can be done, but something like this is more than I expected in the first place."
Luke Swarthout is a higher education lobbyist that worked to help push the issue of rising college costs to the foreground. Swarthout said he was extremely excited to see lawmakers work together to pass a bill that would make student aid more admissible.
Swarthout said he also agrees with Huseman and thinks there is long road to improving student costs that have been surpassing the rate of inflation by 40 percent over the past five years.
Reach the reporter at: daniel.oconnor@asu.edu.
