Making College More Affordable, More Diverse
New Student Loan Measures Will Make College More Affordable, Particularly for Minority Students
SOURCE: AP/Eric Risberg
The Senate yesterday passed the reconciliation bill in one of the final steps in the year-long struggle for health care reform. But as it did so, it simultaneously approved a proposal that would help millions of young people afford college—especially Latinos and African Americans.
The most important education investment in the bill is $36 billion for the Pell grant program, which provides need-based grants to low- and middle-income students. The bill ties the maximum Pell grant award to inflation to ensure that it maintains more of its value overtime, and increases the maximum award to $5,550 next year.
The reconciliation bill will also make student debt more manageable by lowering the monthly payments required of Income-Based Repayment program borrowers from 15 percent to 10 percent of discretionary income—the amount of your adjusted gross income minus 150 percent of the federal poverty level for your family size and state—and by reducing the amount of time borrowers have to wait for their loans to be forgiven from 25 years to 20 years. And it will invest billions in minority-serving institutions, historically black colleges and universities, college access programs, and community colleges.
If the Senate had rejected the bill, the administration warned that an existing funding shortfall in the program would have forced it to cut grant award levels by 60 percent and kick half a million students out of the program all together next year. The consequences for millions of students could have been dire with state budget cuts, forcing large tuition hikes across the country at the same time that many are struggling with unemployment or other economic problems that prevent them from contributing as much to their own or their children’s education.
Minority students rely on the Pell grant disproportionally, and so cutting the program would have in particular hindered the students’ ability to afford a college education. Many of the 46 percent of black and 39 percent of Hispanic students who received the grant in 2007 and 2008 could be forced to turn to dangerous private student loans, compromise their studies by working long hours, or even forgo a college education.
It’s true that many students of color receive Pell grants, but minority students also face disproportionate unmet need—the amount still needed to pay for college even after the expected family contribution, all grants, and all nonprivate loans. Women also tend to have more precarious financial situations when it comes to paying for college.
A striking portion of all students—more than half—face some level of unmet need, and the Great Recession may be forcing this number even higher.
The college affordability crisis is already wreaking havoc on young people and students across the country, and the Senate did the right thing by not letting the millions of dollars student loan companies spent lobbying against reform distract them from the task at hand: ensuring that everyone has a chance to get an affordable postsecondary education.
Pedro de la Torre III is the Advocacy Senior Associate for Campus Progress.
For more information, see:
- Video: Health Care + Student Aid = Help for Millennials
- The Odd Couple: Student Aid and Health Reform Join to Help Americans by Pedro de la Torre III
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