New Report Highlights Need to Expand Families’ Access to Reliable Federal College Aid
WASHINGTON, D.C. – Students and families are increasingly relying on Pell Grant scholarships and other forms of federal student aid to help pay for college, a new report released today by the College Board shows. While college tuition prices continued to increase at rates consistent with years past, students had greater access to reliable low-cost federal loans and grant aid. The report also shows that private student loan borrowing decreased by 50 percent from one year earlier, in part due to the freezing of the credit markets.
“Although paying for college remains far too expensive a burden for families, especially in this economy, this report shows that our work to help make college more affordable is paying off,” said U.S. Rep. George Miller, the chairman of the House Education and Labor Committee. “The financial roller coaster of the last year revealed deep weaknesses in the private financing of student loans. The good news is, thanks to swift action by Congress to safeguard federal student loans, families still had access to college aid during the worst moments of this economic monsoon.
“This report also shows that, for the second year in a row, more students are relying on the Pell Grant scholarship than ever before. If we’re serious about reversing the trends that have made too many students a part of ‘generation debt’, we have to continue to restore the purchasing power of the Pell Grant. The House recently passed legislation that would make a landmark $40 billion investment to boost the Pell Grant over the next 10 years, to stabilize access to low-cost federal student loans, to strengthen Perkins loans, and do much more to make college more accessible at no cost to taxpayers. This report confirms that these types of investments, coupled with our ongoing efforts to reduce students’ dependence on costlier private loans, are needed to provide relief to families in a difficult economy.”
According to the report, the College Board’s annual review of trends in college pricing and student aid, the number of students receiving Pell Grants in 2008-09 rose to 6.1 million, up from 5.4 million the year before.
The report also shows that federal student loan borrowing options remained readily available for students throughout the economic downturn. While private student loans comprised 25 percent of all student loan borrowing in 2007-08, it decreased to just 13 percent of all borrowing in 2008-09. More students borrowed unsubsidized federal student loans, which carry lower interest rates and more favorable terms and conditions than private loans.
Miller is the author of the Student Aid and Fiscal Responsibility Act, legislation the House passed in September that will invest $87 billion in college aid and President Obama’s other education priorities at no new cost to taxpayers. The bill pays for itself by making long-overdue reforms to the student loan programs that will guarantee families access to reliable, low-cost federal loans in any economy. The Senate is expected to consider similar legislation soon. For more information, click here.
In the last Congress, Miller also authored several laws that made college more affordable, strengthened consumer protections for borrowers of both federal and private student loans, and protected federal student loans from turmoil in the financial markets. For more information on those laws, click here.
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