PUC Chronicle

Issue date: 10/22/07 Section: News

Media Credit: Chronicle illustration by Mike Schaefer A new act presented to President Bush increases Stafford loan limits, decreases interest rates and increases the number of Pell Grants.

PUC students who have trouble meeting tuition expenses each year may receive help from a new act passed by Congress and signed by President George W. Bush in early October titled, The College Cost Reduction and Access Act of 2007.

The act, the largest increase in financial aid since the G.I. bill, makes college more affordable by increasing Stafford loan amounts and increasing the number and size of need-based Pell grants awarded to students each year.

In addition, the act will decrease interest rates for Stafford loans from 6.8 percent to 3.4 percent over the next five years and increase the Stafford loan limits placed on freshmen and sophomore students to allow underclassmen to borrow more money at the start of their college careers.

For Indiana students, the act will make more money available through Stafford loans and Pell grants. Next year Indiana students will have access to an additional $49 million in Pell grants from the state and an increase in the average grant amount per student from $350 to $2,780 next year.

Both Indiana senators Richard Lugar and Evan Bayh voted for the financial aid increase which passed the Senate in a 72-12 vote.

"A college education is a necessity, not a luxury, for young people who strive to succeed in today's competitive global economy," Senator Bayh said. "The steps taken by Congress will help ensure that students who work hard, sacrifice and make the grade will have the chance to earn a college degree."

Prior to its passage, the act had received considerable opposition from congressional Republicans, the Bush administration and from private loan companies for several contentious additions to the act.

Under a portion of the act subsidies previously given to private loan companies from the government will be cut, making it more difficult for privately-owned high-interest rate loan companies like Nelnet and Sallie Mae to stay afloat.

Congressional Republicans and the Bush administration also criticized a section of the act which will forgive the student loans of those in public service careers for at least 10 years. Teachers, nurses and social workers would qualify for loan forgiveness if responsible loan repayments are made after college for those 10 years.

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