President Bush approved legislation that will provide a large increase in student aid at no expense to the taxpayer; it provides savings to debt-burdened families that can begin as early as this month.
The College Cost Reduction and Access Act will increase college financial aid by approximately $20 billion over the next five years. The legislation pays for itself by reducing excessive federal subsidies paid to lenders in the college loan industry.
When Patricia Hurley, Financial Aid Director, was asked how this bill would affect students at GCC she said, “Based on the formula in the Higher Education Act, only California community colleges have ever had tuition low enough to trigger the provision.
“So, our students have been the only ones in the country not eligible for a full Pell Grant.?This is important because the bill also includes increases in the Pell Grant,” which will increase the maximum grant and the amount to which California community college students are entitled.
?The House and Senate both approved legislation, with strong bipartisan support, and the president’s signature on Sept. 27. The House approved the bill 292 to 97, while the Senate voted 79 to 12.
“Today is truly a historic day for students, families and the future of our country,” said Democratic Rep. George Miller of California, chairman of the Education and Labor Committee and author of the legislation.
Federal Pell grants, unlike loans, do not have to be repaid. Pell Grants are usually awarded only to undergraduate students who have not earned a bachelor’s or a professional degree. Under the legislation, the maximum value of the Pell Grant scholarship will increase by $1,090 over the next five years, reaching $5,400 by 2012, up from $4,050 in 2006 thus restoring the purchasing power of the Pell Grant scholarship.
In California alone, approximately 574,226 students receive Pell Grants.
?At GCC, Hurley said, more than “9,000 students receive at least a BOG fee waiver annually.? Approximately 5,000 students receive funds from one or more of the following:? Pell Grants, Cal Grants, work-study and student loans. Approximately 4,500 students receive the Pell grant.”
?The Board of Governors (BOG) fee waiver is a California Community Colleges financial aid program for California residents that waive the enrollment fees for students. Any student enrolled for any number of units who meets the BOG criteria may receive a BOG. You only need to apply once each academic year.
The application covers the semester you apply and any subsequent semesters in the school year. Although the BOG, Cal Grants and work study are not affected by the bill, they are still a crucial part of financial aid for community college students.
The bill will also cut interest rates in half on need-based student loans, from 6.8 percent to 3.4 percent, over the next four years. Once fully developed, it will save the typical student borrower with $13,800 in need-based student loan debt, $4,400 over the life of the loan. About 6.8 million students take out need-based loans each year.
“This legislation delivers urgently needed financial relief to qualified students and families who are working very hard to pay for college, to help our economy, and to keep America at the forefront of innovation and discovery,” said Miller.?????
The final bill changes many of the ground rules for financing higher education, offering forgiveness on student loans to graduates who work for ten years or more in public service professions such as government, military, public safety, public health, public education, social work, public child care, public service for disabled and elderly, public libraries and school-based services.?
It will also make student loan payments more manageable for students by guaranteeing that borrowers will not have to pay more than 15 percent of their income in loan repayments, and allowing borrowers to have their loans forgiven after 25 years.
For the first time, the government will auction off the right to offer federally backed educational loans to parents state by state, instead of setting the rate from Washington.
In order to be eligible to receive any financial aid or grants, students fill out a Free Application for Federal Student Aid (FAFSA) at http://www.fafsa.ed.gov. For further information regarding financial aid, contact the financial aid office: (818) 240-1000 , ext. 5916.
