College Cost Reduction Act

As of July 1st, 2008, college students really had something to cheer about. The interest rate of federal student loans was dropped from 6.8 % to 6%, the first of four cuts within the next four years in an effort to half interest rates, dropping them down to 3.4% by 2012. This reduction of interest rates is a result of the College Cost and Reduction Act designed by House of Reps Chairman George Miller's legislation, and signed into law on September 27, 2007. The act was proposed as a result of the unfair interest rates, kickbacks, and preferential treatment being imposed on student by lenders. As the cost for college tuition continues to rise , student are borrowing record amounts, more than 2o billion dollars a year on some accounts, and before the college cost and reduction act student loans were one of the largest profits for lenders, second only to credit card interest.
The College Cost and Reduction Act provides the single largest increase in college aid since the GI bill and does so at no cost to taxpayers by cutting excess subsidies paid by the federal government to lenders in the student loan industry. The interest rate cut will save the typical student borrower beginning college in 2008 about $2,570 over the life of his or her loan. Need-based federal student loans are primarily awarded to low- and middle-income students; according to the Congressional Research Service, 75 percent of need-based federal student loan borrowers have family incomes below $67,000. About 5.5 million students borrow these loans each year to help pay for college. Altogether, the College Cost Reduction and Access Act will boost college financial aid by $20 billion over the next five years. Other benefits of this law include increases in the Pell Grant scholarship by 490 dollars, the first of five annual steps towards boosting the Pell Grant scholarship by a total of 1,090 dollars by 2012, providing up-front tuition assistance to college students who commit to teaching high need subject area in high-need public schools after graduation, and providing loan forgiveness to college graduates who enter public service professions after 10 years of public service and loan repayments.
Political interest in student loans has slowed since the passing of this bill and neither presidential candidate has much to say as far as higher level education is concerned.
Although this bill helps many students pay for college and greatly reduces the corruption of student loans(at least federal student loans), there are still many problems that arise from the continuing increase in college costs. It is difficult for both middle-class and low-income families, especially those with more than one child in college, to pay for tuition and while lately the number of federal student loans has increased, they should an option for anyone with the brains to go to college but not the money. One of the main problems with student loans is that they are not always widely advertised and are complicated to understand. One thing that the government can do to help is to increase awareness of loans and grants offered and decrease the amount of work involved in applying. Time is money and many people simply don't have the time to search for and apply to lengthy government aid applications and programs.