NAICU Washington Update

President Signs Student Aid Reconciliation Bill

October 03, 2007

On September 27, President Bush signed into law the College Cost Reduction Act, also known as the higher education reconciliation bill. Touted as the biggest investment in student aid since the GI bill, P. L. 110-084 cuts roughly $20 billion from student loan lender subsidies and redistributes those dollars to new benefits for students. (See the detailed analysis of the bill in the September 13 issue of Week in Review.)

Most notably, the law includes a five-year plan to increase the Pell Grant maximum from $4,310 to $5,400 by 2012. It also cuts student loan interest rates in half over five years; makes more students eligible for student aid through changes in need analysis; creates special grants for students going into teaching; and creates a loan auction pilot program.

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