WASHINGTON, D.C. – Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor and Pensions Committee, released the following statement today after President Obama signed into law a landmark package of student lending reforms.
“The last few weeks in Washington have been truly historic. Comprehensive health reform is no longer just a promise – it is the law of the land. And with his signature today, President Obama enacts fundamental student loan reform and a historic investment in higher education.
“For middle-class families, one of the biggest challenges comes when their children reach college age. The questions around the kitchen table are: How do we pay for college? And what do we do when our children become too old to stay on the family’s health insurance plan?
“Today, we address this challenge head-on. The comprehensive health bill signed into law last week allows adult children to stay on their parents’ health insurance plan until age 26. And the bill signed today increases the maximum Pell Grant for college students from $5,550 in 2010 to $5,975 by 2017. This combination is a win-win for middle-class families.”
Specifically, the education reconciliation measure will:
Provide increases in the maximum Pell Grant award to keep up with inflation. The bill increases the maximum award to $5,550 next year and to almost $6,000 by 2017, by indexing the award to the Consumer Price Index starting in 2013 to match rising costs-of-living for five years. The Bureau of Labor Statistics projects that by the year 2018 nearly 75 percent of all new jobs will require at least an associate’s degree. In the 2008-2009 award year, 6.2 million Americans relied on Pell Grants to help pay for college and career training. Eighty-nine percent of those students came from families making less than $40,000. A strong Pell Grant program is essential to help a new generation of Americans enter college or workers return for training to gain the education and skills needed for jobs in the 21st century economy.
Reduce the deficit. This bill provides more than $10 billion in deficit reduction to exceed the reconciliation instruction issued to the HELP Committee.
Provide funding for Minority-serving Institutions. The bill continues funding provided in the 2007 education reconciliation bill for Historically Black Colleges and Universities, Hispanic-serving Institutions, Tribal Colleges and Universities and other MSIs. It provides $2.55 billion to support the critical role these institutions play in educating our country’s low-income and minority students.
Bolster Community Colleges. The bill makes a major new investment of $2 billion over four years in community colleges. The Community College and Career Training Grant program will support programs and courses designed to help unemployed Americans and other individuals facing barriers to employment. The bill more than doubles the 2007 reconciliation bill’s investment in the College Access Challenge Grant program, providing $750 million for students. These formula grants to states help organizations provide services that increase the number of low-income students who are prepared to enter and succeed in college and manage their student loans, such as financial literacy and debt management skills.
Make Loan Repayment More Manageable. Starting in 2014, the bill lowers the burden of student debt by capping a new borrower’s loan payment at 10 percent of their net income, after adjustments for basic living costs, and forgiving any remaining debt after 20 years.
For a myth/fact document on the legislation, click here: http://harkin.senate.gov/documents/pdf/4ba24139781c1.pdf