The Cost of College: A Win for the Good Guys

What a difference a year makes. The Republican-controlled 109th Congress doubled student interest rates and cut $12 billion out of student aid.

The new Democratic 110th Congress has cut the student interest rates and put $20 billion into aid programs. The money comes directly out of the banks' pockets and into the pockets of students and working families.

Nancy Pelosi and the Democrats get credit, to be sure. College affordability was one of the "Six in '06" campaign promises, and Pelosi hit it out of the ballpark. Representative George Miller, D-Calif., was a hero, and Massachusetts Senator Edward Kennedy worked hard in the other chamber.

But real credit goes to the progressive community. The Campaign for College Affordability banded together to drive for reform. Members such as U.S. PIRG, the United States Student Association, Campus Progress and the Campaign for America's Future provided tactical intelligence and public support. They gave the members the cover they needed to overcome veto threats without watering down the legislation.

My past blog post discussed the payola for the banks, and our report and web page show how college is soaring out of reach (from 2000 to 2006, household incomes went down 2 percent while tuition went up 37 percent). Here I want to summarize the new legislation.

• Pell Grant Increase: Increases the Pell Grant over the next five years from $4,050 to $5,400; with an initial increase of $490 for this upcoming school year.

• Lender Subsidies: Takes over $20 billion dollars away from private lender subsidies and reasserts that money into increased student aid programs.

• Subsidized Stafford Loans: Reduces the interest rate on subsidized Stafford loans by half, starting on July 1, (from 6.8 percent to 3.4 percent) over four years; these loans to go students who demonstrate financial need.

• Loan Repayment and Forgiveness:
Starting July 1, 2009, borrowers would not have to devote more than 15 percent of their discretionary income to repaying Stafford student loans. After 25 years, all borrowers who are in this income-based repayment program will have any remaining balances forgiven.

• Teacher Tuition Assistance:
Undergraduate and graduate students who commit to teaching certain subjects, such as science and math, in low-income public schools for at least four years can receive up to $4,000 per year - for a total of $16,000 - in tuition assistance.

• Loan Forgiveness:
Borrowers who work in other public-sector jobs such as the military, law enforcement, firefighting, nursing, public defenders, librarians and early childhood teachers can have any balance on their student loans forgiven after 10 years of service and loan repayment.

This bill shows what can happen when progressives stand together and refuse to back down. May this strength be a harbinger of things to come.