Student loans

Student Aid and Fiscal Responsibility Act of 2009

hmoroz — Mon, 03 Aug 2009 10:48:02 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Estimated savings from the Student Aid and Fiscal Responsibility Act’s termination of federal subsidies to private student lenders: $86.8 billion

Average total student loan debt for 2006-2007 bachelor’s degree recipients: $22,700

Maximum Pell Grant in 2009: $5,350

Maximum Pell Grant in 2019, under the Student Aid and Fiscal Responsibility Act: $6,900

Estimated number of students who will receive aid through the Pell Grant Program in 2009-2010: 7 million

Percentage of Pell Grant recipients whose parents’ income was below $40,000 in 2007-2008: 83

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. Although a college education is increasingly a prerequisite for a middle-class standard of living, current and aspiring middle-class students and their families are struggling more than ever to afford college. A massive $87 billion subsidy to private companies that make student loans did little to promote affordability. It makes sense for the federal government to eliminate this waste by expanding its Direct Loan program, which is already serving as an effective lender for an increasing number of students as the credit crisis continues to threaten the market for private student loans.

Now the money can be redirected to genuinely help Americans afford college. Approximately $40 billion would increase the maximum Pell Grant, the most widely used college assistance program that helps lower-income students attend college. In recent years, the program has failed to keep pace with the rising cost of college: thirty years ago the maximum Pell Grant covered 77 percent of the cost of attending the average four-year public school, but today it covers only 35 percent. Increasing the maximum award would restore some of this lost purchasing power, providing more students from lower-income families with an opportunity to attend college. The bill’s provision for automatic Pell Grant increases helps ensure that the Pell Grant permanently maintains its value. Caps on interest rates and a reworked fixed interest-rate program will not only make college more affordable for all students, but will make obtaining and keeping a middle-class standard of living easier by reducing the growth of student loan debt, which now averages almost $23,000 for bachelor’s degree recipients, and reducing student loan defaults. An increased debt load can make it difficult for young graduates to make ends meet, much less begin saving or pursue careers in teaching and public service.

Funds for a variety of initiatives to increase access to early-childhood education and graduation rates, to modernize schools, and to improve community colleges will expand the opportunity for students to succeed at all levels of education.

Quotes from Experts

Beyond this Bill

Additional Resources

“Window of Opportunity: Targeting Federal Grant Aid to Students with the Lowest Incomes,” from the Institute for Higher Education Policy

“Trends In Student Aid,” from the College Board

“Student Aid on the Web,” from the U.S. Department of Education

Student Aid and Fiscal Responsibility Act of 2009

hmoroz — Mon, 03 Aug 2009 10:48:02 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Estimated savings from the Student Aid and Fiscal Responsibility Act’s termination of federal subsidies to private student lenders: $86.8 billion

Average total student loan debt for 2006-2007 bachelor’s degree recipients: $22,700

Maximum Pell Grant in 2009: $5,350

Maximum Pell Grant in 2019, under the Student Aid and Fiscal Responsibility Act: $6,900

Estimated number of students who will receive aid through the Pell Grant Program in 2009-2010: 7 million

Percentage of Pell Grant recipients whose parents’ income was below $40,000 in 2007-2008: 83

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

“Window of Opportunity: Targeting Federal Grant Aid to Students with the Lowest Incomes,” from the Institute for Higher Education Policy

“Trends In Student Aid,” from the College Board

“Student Aid on the Web,” from the U.S. Department of Education

Reverse the Raid on Student Aid Act of 2006

hmoroz — Mon, 27 Jul 2009 14:16:39 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Median debt level of bachelor degree recipients who borrowed for college: $19,300

Percentage of college graduates under age 35 that are paying off college debt who say their loans will take them more than ten years to pay off: 39

Percentage of them who say they have delayed a medical or dental procedure because of their debts: 27

Proportion who say their college loan debts have caused them to delay getting married: 1 in 6

Percentage of Americans who say that the federal government is doing too little to make
higher education more available and affordable for people of all backgrounds: 64

Percentage of Americans who believe the amount of student loan debt carried by students graduating from college today is manageable: 31

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Although a college education is increasingly a prerequisite for a middle-class standard of living, current and aspiring middle-class students and their families are struggling more than ever to afford college. 60% of students graduating with bachelors degrees in 2006 used student loans to pay for their education, and they carried a median total debt of $19,300.

By reducing the interest rate on subsidized loans, from 6.8% to 3.4%, the amendment would save a student borrower up to $5,600 over the life of his or her loan. Expanding the Pell Grant program would allow financially strapped students to take classes year round, whether out of financial necessity or a desire to finish their studies faster. The grants authorized by the legislation target assistance to make college more accessible to those low-income and minority students that cannot afford higher education. Loan forgiveness for students who train in areas of national need like teaching and nursing will keep some of the most important career paths open to all students regardless of their financial situation after graduation. The amendment would not only help students and families struggling to afford college costs, but would also help relieve graduates of debt burdens that may negatively impact the future course of their lives.

Quotes from Experts

Beyond this Bill

Additional Resources

The Project on Student Debt, a project of the Institute for College Access and Success

Student Debt Alert, a project of the student Public Interest Research Groups

Trends in Student Aid 2006, from the College Board

Reverse the Raid on Student Aid Act of 2006

hmoroz — Mon, 27 Jul 2009 14:16:39 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Median debt level of bachelor degree recipients who borrowed for college: $19,300

Percentage of college graduates under age 35 that are paying off college debt who say their loans will take them more than ten years to pay off: 39

Percentage of them who say they have delayed a medical or dental procedure because of their debts: 27

Proportion who say their college loan debts have caused them to delay getting married: 1 in 6

Percentage of Americans who say that the federal government is doing too little to make
higher education more available and affordable for people of all backgrounds: 64

Percentage of Americans who believe the amount of student loan debt carried by students graduating from college today is manageable: 31

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Although a college education is increasingly a prerequisite for a middle-class standard of living, current and aspiring middle-class students and their families are struggling more than ever to afford college. 60% of students graduating with bachelors degrees in 2006 used student loans to pay for their education, and they carried a median total debt of $19,300.

Quotes from Experts

Beyond this Bill

Additional Resources

The Project on Student Debt, a project of the Institute for College Access and Success

Student Debt Alert, a project of the student Public Interest Research Groups

Trends in Student Aid 2006, from the College Board

American Recovery and Reinvestment Act of 2009 - House Version

hmoroz — Thu, 29 Jan 2009 11:59:07 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Unemployment rate in early 2010, if current laws and policies governing federal spending and taxes do not change, according to the Congressional Budget Office: 9.2%

Reduction in unemployment rate in 2010 if the American Recovery and Reinvestment Act is enacted, according to the Congressional Budget Office, Mark Zandi of Moody’s Economy.com, and White House economic advisers, respectively: 1.9%, 2.1%, 1.8%

Number of individuals that expanded health insurance benefits included in the legislation will keep from losing health insurance: 8.5 million

Increase in GDP from spending $1 on extended unemployment insurance benefits, in dollars: 1.63

Increase in GDP from spending $1 on accelerated depreciation, which provides businesses a tax break for new investment, in dollars: 0.25

Number of dollars spent on highways for every four dollars spent on transit: 10

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Economic conditions are bleak. The Congressional Budget Office estimates that if the economy continues on its current course, both the length and depth of the current downturn will be the worst since the Great Depression. For middle-class Americans, this means job and wage cuts, loss of health insurance, and, simply, a daily struggle to keep up with everyday costs like mortgage payments and college tuition.

The Congressional Budget Office estimates that if current economic conditions persist the unemployment rate could reach as high as 9.2% by 2010. With 46 million Americans already uninsured, the Kaiser Family Foundation reckons that if unemployment averages just 7% in 2009 (the current rate is 7.2%), the number of uninsured will increase by 2.6 million with an additional 2.4 million individuals enrolled in Medicaid and SCHIP. Indeed, state governments are struggling to provide the increased services needed to keep the swelling ranks of unemployed, uninsured individuals from falling out of the middle class. But the current economic climate has left states with decreased revenue from income, sales, and property taxes: 45 states face budget shortfalls with combined budget gaps of $350 billion through 2011. To confront these gaping budget holes, more than 20 states have implemented or are considering cuts to health insurance programs; the same is true of K-12 and early education programs and of funds for public colleges and universities.

Beyond the decidedly dire short-term outlook, economic improvement is probably quite far off. Douglas Elmendorf, director of the Congressional Budget Office, has testified that “economic recovery is likely to be slow and protracted.” Thus, programs that address longer-term concerns – investment in infrastructure and green technology are two primary examples – are as important as an immediate, stimulative jolt to the economy.

The American Recovery and Reinvestment Act ties together measures designed to assist middle-class households struggling to make ends meet, provisions that will provide an immediate economic stimulus, and investment that can help set the stage for an economy built on energy efficiency and durable infrastructure. Economists generally agree that the legislation will save around 3 or 4 million jobs by 2010, while increasing economic output. Indeed, the Congressional Budget Office, Mark Zandi of Moody’s Economy.com, and White House economic advisers all project that the legislation will reduce the unemployment rate by around 2%. Extended unemployment insurance will allow 6.7 million people to collect benefits. Expanded COBRA and Medicaid insurance programs will keep 8.5 million individuals from losing insurance. Importantly, aid to state governments for Medicaid and education programs would shore up budget gaps and help prevent cuts to vital services.

While assisting those most at need during the economic downturn, extended unemployment insurance and state fiscal assistance also generate the most “bang for their buck" in terms of stimulus because they funnel money into the hands of the people most likely to spend it. Extended unemployment insurance generates an estimated $1.63 in economic activity for each dollar spent; aid to state governments generates $1.38. In contrast, though they act more quickly than spending measures, tax cuts generate less stimulus. The Making Work Pay, Child, and Earned Income tax credits will help keep more than 2.5 million Americans out of poverty and the American Opportunity credit will make 3.8 million more students eligible for a higher education tax break. These are important measures that will assist aspiring middle-class and middle-class Americans struggling to make ends meet. But the expansions are temporary and tax cuts, even when refundable and directed at the low-income individuals most likely to spend them, are less effective stimulus measures. Worst of all, though, are tax cuts for businesses like accelerated depreciation and carryback loss provisions that have little economic benefit.

Despite concern that the spending included in the American Recovery and Reinvestment Act will be delayed, perhaps a valid concern due to the legislation’s size and complexity, the Congressional Budget Office estimates that 85% of the spending will occur between 2009 and 2011. Indeed, funds for investment in infrastructure and energy efficiency, though perhaps more complicated to spend, are a critical step in longer term economic recovery. Beyond its stimulative value – infrastructure spending’s “bang for the buck” is $1.59 – the United States desperately needs new infrastructure to compete in the global economy. The American Society of Civil Engineers estimates that $2.2 trillion in infrastructure spending is now necessary. The $160 billion for infrastructure projects included in the legislation is a first step in addressing this deficiency. Similarly, spending on a modernized electricity grid, retrofitted low-income housing, and weatherized homes creates the framework for a future economy less reliant on fossil fuels and, indeed, based on green technology.

Quotes from Experts

Beyond this Bill

Additional Resources

“Recession and Recovery,” from the Center on Budget and Policy Priorities

“The State of the Economy and Issues in Developing an Effective Policy Response,” Statement of Douglas W. Elmendorf before the House Committee on the Budget

“Impact of Economic Turmoil on Health Coverage and State Medicaid Programs,” from the Kaiser Commission on Medicaid and the Uninsured

American Recovery and Reinvestment Act of 2009 - House Version

hmoroz — Thu, 29 Jan 2009 11:59:07 -0500

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Unemployment rate in early 2010, if current laws and policies governing federal spending and taxes do not change, according to the Congressional Budget Office: 9.2%

Number of individuals that expanded health insurance benefits included in the legislation will keep from losing health insurance: 8.5 million

Increase in GDP from spending $1 on extended unemployment insurance benefits, in dollars: 1.63

Increase in GDP from spending $1 on accelerated depreciation, which provides businesses a tax break for new investment, in dollars: 0.25

Number of dollars spent on highways for every four dollars spent on transit: 10

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

“Recession and Recovery,” from the Center on Budget and Policy Priorities

“The State of the Economy and Issues in Developing an Effective Policy Response,” Statement of Douglas W. Elmendorf before the House Committee on the Budget

“Impact of Economic Turmoil on Health Coverage and State Medicaid Programs,” from the Kaiser Commission on Medicaid and the Uninsured

Higher Education Opportunity Act of 2008

hmoroz — Wed, 06 Aug 2008 15:56:11 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of dependent Pell Grant recipients whose family income is less than $20,000: 40

Percentage of tuition and fees (including room and board) at public four-year colleges that was covered by the maximum Pell Grant in the 1986-1987 school year: 52

Percentage of tuition and fees (including room and board) at public four-year colleges that was covered by the maximum Pell Grant in the 2006-2007 school year: 32

Amount that the average college student pays for textbooks each year: $900

Average number of hours that the Brookings Institution estimates an applicant needs to complete the FAFSA: 10

Number of hours a year spent filling out financial aid forms: 100 million

Equivalent in full-time jobs: 55,000

Number of students who have not received financial aid due to drug convictions since the provision went into effect in 2000: 200,000

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Although a college education is increasingly a prerequisite for a middle-class standard of living, current and aspiring middle-class students and their families are struggling more than ever to afford college. Indeed, in recent years the maximum Pell Grant, designed to provide financially strapped students with an opportunity to attend college, has failed to keep pace with rising higher education costs. 2007’s College Cost Reduction and Access Act, which increased the maximum Pell Grant and limited federal subsidies to student lenders in order to increase college financial aid by $20 billion, was a necessary first step in making college more affordable. The Higher Education Opportunity Act’s additional increase of the maximum Pell grant will make college accessible to more aspiring middle-class Americans. Additionally, the expansion of the Pell Grant program to include year-round education supports the hardest-working students struggling to complete their educations quickly. Continued commitment to the TRIO and GEAR UP programs is critical to ensuring that first generation and at-risk students are able to obtain a college education and achieve a middle-class standard of living.

Skyrocketing tuition costs and large and confusing debt obligations can make college unaffordable and financial stability after college difficult. Indeed, the College Board reports that average tuition and fees at four-year public institutions have increased 51% over the last five years and that private undergraduate loans have grown from 3% to 12% of the funds used to finance postsecondary education since the 1996-1997 school year . The Higher Education Opportunity Act improves a student loan system that has been characterized by favoritism and murky lending practices. The Act will help put an end to the most egregious conflicts of interest and will expand and simplify the information that is available to students and their families when deciding what colleges to attend and what loans to take out. Ending such conflicts of interest will ensure that students receive the most affordable loans, not loans that are the favorites of an unethical financial aid officer. A simplified application form for federal student aid will ensure that students are not dissuaded from seeking financial assistance for higher education because of complex paperwork. Stricter reporting requirements for institutions that that fail to rein in tuition hikes are a positive step in influencing institutions of higher education to make college more affordable. Efforts to reduce the cost of textbooks will also be helpful to students struggling with high costs.

Quotes from Experts

Beyond this Bill

Additional Resources

Higher Education Project, from U.S. Public Interest Research Group

Window of Opportunity: Targeting Federal Grant Aid to Students with the Lowest Incomes, from the Institute for Higher Education Policy

Trends in College Pricing 2007, from the College Board

Higher Education Opportunity Act of 2008

hmoroz — Wed, 06 Aug 2008 15:56:11 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Percentage of dependent Pell Grant recipients whose family income is less than $20,000: 40

Percentage of tuition and fees (including room and board) at public four-year colleges that was covered by the maximum Pell Grant in the 1986-1987 school year: 52

Percentage of tuition and fees (including room and board) at public four-year colleges that was covered by the maximum Pell Grant in the 2006-2007 school year: 32

Amount that the average college student pays for textbooks each year: $900

Average number of hours that the Brookings Institution estimates an applicant needs to complete the FAFSA: 10

Number of hours a year spent filling out financial aid forms: 100 million

Equivalent in full-time jobs: 55,000

Number of students who have not received financial aid due to drug convictions since the provision went into effect in 2000: 200,000

Overview/Summary

Middle Class Position Analysis

Middle Class Supports. Although a college education is increasingly a prerequisite for a middle-class standard of living, current and aspiring middle-class students and their families are struggling more than ever to afford college. Indeed, in recent years the maximum Pell Grant, designed to provide financially strapped students with an opportunity to attend college, has failed to keep pace with rising higher education costs. 2007’s College Cost Reduction and Access Act, which increased the maximum Pell Grant and limited federal subsidies to student lenders in order to increase college financial aid by $20 billion, was a necessary first step in making college more affordable. The Higher Education Opportunity Act’s additional increase of the maximum Pell grant will make college accessible to more aspiring middle-class Americans. Additionally, the expansion of the Pell Grant program to include year-round education supports the hardest-working students struggling to complete their educations quickly. Continued commitment to the TRIO and GEAR UP programs is critical to ensuring that first generation and at-risk students are able to obtain a college education and achieve a middle-class standard of living.

Quotes from Experts

Beyond this Bill

Additional Resources

Higher Education Project, from U.S. Public Interest Research Group

Window of Opportunity: Targeting Federal Grant Aid to Students with the Lowest Incomes, from the Institute for Higher Education Policy

Trends in College Pricing 2007, from the College Board

Ensuring Continued Access to Student Loans Act of 2008

hmoroz — Thu, 24 Apr 2008 15:36:42 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Minimum number of student lenders in the Federal Family Education Loan Program: 2,000

Percentage growth in undergraduate federal borrowing between 1996-1997 and 2006-2007 school years: 51

Percentage increase in the number of undergraduate subsidized Stafford loan borrowers between the 1996-1997 and 2006-2007 school years who do not have to pay interest on their loans while attending school: 47

Percentage increase in the number of undergraduate unsubsidized Stafford loan borrowers between the 1996-1997 and 2006-2007 school years who must pay interest on their loans while attending school: 113

Percentage of total funds used to finance postsecondary education composed by private loans in the 1996-1997 school year: 3

Percentage of total funds used to finance postsecondary education composed by private loans in the 2006-2007 school year: 12

Overview/Summary

Middle Class Position Analysis

The Middle Class Supports. With 66% of students at four-year colleges holding student loan debt, the credit crunch has generated concerns that aspiring middle-class and middle-class college students and their parents will be unable to obtain the loans they rely on to afford college. Federally backed student loans, which are cheaper than private student loans, provide these students with a financial gateway to higher education. Increasing the amount of Stafford loans that students are able to borrow would help students cope with tuition costs that they would otherwise have to fund with more expensive private loans. The delay in PLUS loan repayment authorized by the bill, along with the exemptions for delinquency on mortgage and medical bill payment, recognize that the declining economy in general, and the collapsing housing market and rising health care costs in particular, are squeezing many middle-class American families. In conjunction with the act’s other provisions, the authorizations of funding for lenders-of-last-resort and for purchases of student loans by the government minimizes the risk that the marketplace for federally backed student loans will collapse.

Quotes from Experts

Beyond this Bill

Additional Resources

Trends in Student Aid, from College Board

"House Panel Addresses the Would-Be Student Loan Crisis", from Inside Higher Education

Student Aid on the Web, from the Department of Education

Ensuring Continued Access to Student Loans Act of 2008

hmoroz — Thu, 24 Apr 2008 15:36:42 -0400

Legislation

The middle class

Supports

Video Summary

Injustice Facts

Minimum number of student lenders in the Federal Family Education Loan Program: 2,000

Percentage growth in undergraduate federal borrowing between 1996-1997 and 2006-2007 school years: 51

Percentage of total funds used to finance postsecondary education composed by private loans in the 1996-1997 school year: 3

Percentage of total funds used to finance postsecondary education composed by private loans in the 2006-2007 school year: 12

Overview/Summary

Middle Class Position Analysis

Quotes from Experts

Beyond this Bill

Additional Resources

Trends in Student Aid, from College Board

"House Panel Addresses the Would-Be Student Loan Crisis", from Inside Higher Education

Student Aid on the Web, from the Department of Education

Student loans

Student Aid and Fiscal Responsibility Act of 2009

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Student Aid and Fiscal Responsibility Act of 2009

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Reverse the Raid on Student Aid Act of 2006

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Reverse the Raid on Student Aid Act of 2006

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

American Recovery and Reinvestment Act of 2009 - House Version

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

American Recovery and Reinvestment Act of 2009 - House Version

Legislation

The middle class

Video Summary

Injustice Facts

Overview/Summary

Middle Class Position Analysis

Related Blog: Header

Quotes from Experts

Related Blog: Text

Beyond this Bill

Related Blog: Link

Additional Resources

Higher Education Opportunity Act of 2008