Update from Stabenow on Financial Aid bill

Below is an update from Senator Stabenow that I received via email about a bill Congress passed regarding increased support of financial aid.

My take on this is that it essentially undoes some damage the previous Congress did to financial aid about a year ago.... In any case - I was pleased that she supported it.

I am very pleased to tell you that earlier today, the U.S. Senate passed groundbreaking legislation that will help reduce the cost of higher education, and will direct federal dollars to those areas where they are most needed to help students. This bill will now be sent to President Bush for his signature. Specifically, this new legislation will:

• Increase student aid for low-income and middle-income students by $20 billion - the largest increase since the G.I. bill of 1944. Pell Grants will be increased by $500 next year, and up to $5,400 by 2012 - an increase of more than 25 percent over the next five years. The bill provides $676 million in new tuition grants for Michigan over the next five years.
• Help make student loan debt more manageable. More than 66 percent of undergraduates take out student loans, for an average loan debt of $19,000 per student. The bill just passed by the Senate will cap monthly payments for federal student loans at 15 percent of the borrower's discretionary income. It also cuts interest rates on new subsidized Stafford loans for undergraduates from 6.8% to 3.4% by 2011.
• Forgive student loan debt for those who commit to public service. Students going into public service careers, where the pay is often modest, and we know we will have a shortage in coming years, often have difficulty paying back their loans. The Senate bill will forgive federal loans for students working for at least 10 years in public service careers such as social work, nursing, teaching, or law enforcement.
• New grants for students who teach in high-need schools. Many of our country's poorest school districts are facing severe teacher shortages for specialized subject areas. This new bill encourages high-achieving students to teach by offering scholarships of $4,000 per year for students who commit to teaching high-need subjects in high-need schools.
• Helps students prepare for college. This bill also increases funding for the successful Upward Bound program, to help disadvantaged students prepare, apply to, and succeed in college.
• Reform the student loan system so it works for students. The Senate bill reduces excessive lender subsidies and redirects that money to students who need it the most.

I am proud to have fought for this important legislation to help students afford higher education. Education policy is economic policy -- in Michigan especially, our colleges and universities provide a path to a successful future for our children, and help to fuel our economy. America wins when we invest in education, and I urge the President to do the right thing and sign this bill into law.

I will continue to fight to make higher education and innovation a top priority. As always, please let me know if ever I can be of assistance to you or your family.

Sincerely,
Debbie Stabenow
United States Senator