Some officials call the College Cost Reduction and Access Act of 2007 a landmark piece of legislation, the most comprehensive infusion of funds to student aid since the G.I. Bill helped servicemen and women attain a college degree after World War II.
Still, the 18- to 24-year-old generation reels in debt and some believe this is just a step in the right direction to addressing the issue of higher education attainment.
The act, signed into law Thursday by President George W. Bush, seeks to cut interest rates for student loans in half by 2012 – to 3.4 percent – and push money into the Pell Grant program.
The bill was also a show of bipartisanship, as all of Minnesota’s House and Senate members casted votes in favor of it. Nationwide, 97 House members voted against the bill along with 12 in the Senate.
University President Bob Bruininks called the act an “absolute cornerstone of opportunity,” in a news release.
“In our current fiscal environment, with many other pressures on the public purse, Congress – and our delegation in particular – really stepped up to the plate,” Bruininks said.
At the same time, data reveal student debt has been piling up over the years.
There was an 8 percent average increase in student loan debt for graduating seniors, according to a September 2007 report by the Institute for College Access and Success.
The report found the average debt for the graduating class of 2006 was roughly $21,100.
The report also characterized Minnesota as a “high debt state,” with an average student-debt level of $23,375, a 16-percent increase from 2005.
Tom Mortenson, a senior scholar at the Pell Institute and higher education policy analyst, said the act is a “major event,” but there’s still more work to do.
“Since 1980 – after the progressive era of educational attainment funding – there have not been many high points one can point to during that period where we made policy decisions that sought to broaden educational opportunities for students,” Mortenson said.
He put the burden on the state level to help put money into student aid programs.
“I think states need to be held accountable for their actions,” Mortenson said. “But it’s a breath of fresh air at the federal level.”
The act boosts Pell Grant funding by $11 billion and allows the maximum Pell Grant award to increase from $4,310 in 2007 to $5,400 in 2012, according to a White House fact sheet.
The fact sheet, however, also states that the bill diverts resources that would best be used for Pell Grants given to “poorly targeted policies and new programs – and it fails to account for their costs.”
“By making promises beyond what the bill pays for, the bill leaves to the future of Congress and the next administration the difficult choice of cutting benefits, growing to the deficit and increasing taxes,” the fact sheet states. “The bill also fails to resolve the implementation issues the administration raised with some of the bill’s changes to student loan programs.”
President Bush acknowledged in a signing speech Thursday that “the bill does, however, create new and duplicative programs that divert resources from Pell Grants.”
“This bill makes some spending commitments that aren’t paid for yet, and I look forward to working with Congress to ensure Pell Grant increases that are not fully funded by this bill are paid for with offsets in other areas,” Bush said. “And we’re going to continue working with Congress to make sure the Pell Grant stays strong.”
Dan Gilchrist, a federal lobbyist for the University, said overall “it’s a really big package and it’s really important,” but added that the Pell Grant has lost ground versus tuition and fees.
“It wasn’t a hard sell. A lot of folks at the federal level have been concerned,” Gilchrist said, adding that the Pell Grant is not going to cover what it did 20 years ago.
