WASHINGTON, March 18 – Sen. Bernie Sanders (I-Vt.) announced that an agreement reached today on student aid legislation would provide $36 billion in new spending on Pell grants and preserve a role for the Vermont Student Assistance Corp.
Sanders, a member of the Senate education committee, led the effort on behalf of the Vermont student aid program, known as VSAC, with strong support from Sen. Patrick Leahy (D-Vt.) and Rep. Peter Welch (D-Vt.).
“At a time of soaring college costs, President Obama has proposed substantially increasing the size of federal Pell grants to low- and moderate-income students who go to college. I support President Obama’s proposal to cut the billions in subsidies that big banks all over the country receive to issue federally-guaranteed student loans,” Sanders said. “At the same time, the legislation recognizes that non-profit institutions like VSAC have done important work in guiding students through the complexities of financing their college educations. We fought hard to make sure VSAC will be able to continue doing the excellent and important work it has done so well over the years,” he added.
“I commend Sen. Sanders for his work to continue a meaningful role for VSAC under the changes that are underway in the student loan market,” Leahy said.
“Making college more affordable for Vermont students and families by increasing financial aid opportunities is the right and necessary thing to do. Replacing the for-profit lending industry with direct federal loans will free up valuable resources and allow for an increase in Pell Grants and Perkins Loans,” Welch said. “At the same time, preserving VSAC’s outreach services, which have helped so many Vermonters take advantage of higher education, is of critical importance to our state. I am relieved that Sen. Sanders, Sen. Leahy and I were able to successfully preserve a role for such an important ally to Vermont students and families.”
The legislation requires the Department of Education to provide a steady stream of loans for VSAC and other nonprofit state lending agencies. In recognition of the greater assistance VSAC and others provide to students and their families, the first 100,000 loans that nonprofits service will be reimbursed at a higher rate than large banks receive.
In the education committee, Sanders also fought to preserve the “College Access Challenge Grant Program,” which was under threat of elimination. He also secured significantly increased funding for the program, which will more than double the grant funds VSAC receives for outreach and mentoring support programs.
In recent weeks, both Leahy and Welch vigorously helped Sanders push to make sure that the provisions guaranteeing a continuation of funding sources for VSAC would remain in the bill.
The higher education reforms were combined with a health care reform bill nearing final congressional passage. Pairing the issues and using a time-tested process called reconciliation will enable the Senate to pass both reforms by an up-or-down majority vote, not the supermajority of 60 votes needed to overcome Republican obstruction tactics.
Without the legislation, students could see the maximum Pell grant drop to as little as $2,150 per year. If the legislation is approved, the average Pell grant would go from $5,550 in the next school year to $5,975 in 2017.
In Vermont, students received $27 million in Pell grants last year. Under the plan, Vermont’s total next year would jump to about $45 million. By 2017, Vermont’s share would climb to about $64 million.
In addition, the number of college students who would qualify for loans would increase. Last year, there were 9,653 recipients of Pell grants in the state. Under the proposal, the number would grow to about 13,500 over the coming decade.