By White House | Daily EdNews
mplementing a proposal from his 2008 budget plan, President George W. Bush on Sept. 27 signed into law the largest increase in federal student aid since the GI Bill of 1944. The College Cost Reduction and Access Act of 2007 increases funding for the Federal Pell Grant Program by $11.4 billion over the next five years, raising the maximum annual award to $5,400 by 2012. Unlike loans, Pell grants do not have to be repaid. More than 5 million low-income students receive this federal financial aid annually.
"Pell grants send an important message to students in need: If you work hard, and you stay in school, and you make the right choices, the federal government is going to stand with you," said President Bush.
The legislation also makes it easier to repay loans, by:
· Capping loan payments so that borrowers would not have to devote more than 15 percent of their discretionary income to repaying Stafford student loans. Starting July 1, 2009, this applies to both subsidized and unsubsidized Stafford loans, regardless of when the loans were taken out. After 25 years, any remaining balances will be cancelled.
· Forgiving loans for borrowers working in public-sector jobs—such as those held by members of the military, law enforcement agents, firefighters, nurses, librarians and early childhood teachers—after 10 years of service and loan repayment. Furthermore, students serving in the National Reserve who are called to address a national crisis will be able to defer loan payments for up to 13 months at the end of their service.
In addition, the bill may provide tuition assistance of up to $4,000 per year—for a total of $16,000—to undergraduate and graduate students who commit to teaching certain subjects, such as science and math, in low-income public schools for at least four years.