Congress on Friday approved the largest increase in student aid since passage of the GI Bill after World War II. The legislation provides $17 billion in additional college aid, including $34.2 million over the next five years in new Pell grants for students attending colleges and universities in Vermont. Another $26.7 million is allotted for increased loans to Vermont students. Senator Bernie Sanders, a member of the Senate education committee, played a major role in pushing for higher Pell grants and for the creation of a loan forgiveness program that also is included in the bill. Loans would be cancelled for college graduates who stay in public service jobs - including nursing, education, and law enforcement - for a decade.
"This bill is the most significant improvement in higher education that we have seen in decades," Sanders said. He also noted that "this is not costing taxpayers one nickel. It is paid for by lower subsidies for lenders."
As college tuition soared while federal assistance stagnated, nearly a quarter of public four-year college graduates and over a third of private four-year college graduates leave school with too much debt. Between the 2000-2001 and 2005-2006 school years, the cost of college at four-year public colleges in Vermont increased 29 percent. The cost of four-year private colleges in Vermont rose 30 percent. "Rising costs have placed a college education out of reach for too many hardworking Vermont students and families," Sanders said.
In addition to forgiving loan debts for those in public service careers, the legislation Sanders helped write would increase grants to low-income students, raise the number of students eligible for the maximum Pell grant, decrease the penalty for students who work and receive financial aid, and make loan repayments more manageable for borrowers with significant loan debt by cutting interest rates.
The maximum Pell Grant would go to $5,400 by 2012. Low-income Vermont students would be eligible for an additional $3.15 million in need-based grant aid next year and $34.2 million altogether over the next five years. In Vermont, the maximum Pell grant currently covers only 24 percent of the average public four-year college tuition, fees, room and board in 2005-2006 - down from 30 percent in 1986-1987.
Also under the legislation, a cap on federal student loan payments at 15 percent of a borrower's discretionary income would bring needed relief to students with excessive loan burdens. For example, a social worker with one child in Vermont earning $36,730, with average student loan debt of $19,482, would have his or her monthly payments reduced by $50, from $224 to $174.
The Senate voted 79-to-12 for the higher education bill. It later passed the House of Representatives 292-to-97 and was sent to President Bush, who only on Thursday dropped a veto threat and is now expected to sign the bill.
To listen to Senator Sanders discuss the bill, click here.
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To read more about the legislation, click here.