U.S. Senator Benjamin L. Cardin today joined a bipartisan majority of Senators in voting to approve the College Cost Reduction Act. This legislation will provide over $20 billion in new student aid and benefits, which will mean an additional $24.6 million in grant aid next year and $267.9 million over five years for Maryland students. The bill passed the Senate today with a vote of 79-12.
“Thousands of Maryland students have been denied access to a college education not because of because poor grades or lack of admission. They aren’t able to go to college because of increasing costs,” said Senator Cardin. “We have an obligation to remove financial barriers and increase opportunity so the next generation is able to compete in the global economy.”
Each year, more than 400,000 low-and moderate-income high school graduates are fully prepared to attend a four-year college, but are not able to do so because of financial barriers.
“Today, we took a much-needed step toward changing our philosophy about the impact of college education,” said Senator Cardin. “A college education is no longer just about improving individual stature; it is about strengthening our nation’s economy and remaining competitive in the global market.”
This bill will:
Increase access to college for low-income students by increasing Pell Grants from $4,310 to $5,400 by 2012;
Cut federal loan interest rates in half from 6.8% to 3.4% for undergraduate students with subsidized loans;
Cap federal loan payments at 15% of discretionary income;
Protect working students by increasing the amount of income that is sheltered from the financial aid process;
Encourage public service by providing federal loan forgiveness for public service employees; and,
Provide an additional $500 million investment in minority-serving institutions.
The measure also includes reforms of the student loan system that will direct unnecessary lender subsidies to student aid and inject competition into the loan program.
Later this fall, Congress will consider additional legislation to continue reforms of the student loan industry.
Earlier this week, Senator Cardin met with students and faculty at University of Maryland Eastern Shore and Bowie State University to learn more about financial aid concerns and discuss the impact of the legislation in providing more access to college education for all Maryland students. According to the Chairman’s Report, Maryland college tuition has increased 36 percent since 2000, but the median household income has increased just 11 percent. This bill helps bridge the growing gap between wages and tuition costs.