College Education Savings by the Numbers: July 1st Marks the Beginning of the Largest College Aid Expansion in Six Decades

…from U.S. Rep Dan Boren:

• 47,528 – The number of Oklahoma college students who take out need-based loans each year at 4-year public schools.
• $26,000 to $68,000 – The total family income range of over half of need-based federal student loan borrowers.
• $13,535 – The typical debt of Oklahomans using need-based student loans at 4-year public schools.
• $4,330 – The average savings resulting from the interest rate cut, once fully phased-in, per 4-year Oklahoma college student over the life of a federal loan.

Making college more affordable has a direct impact on providing eastern Oklahomans greater access to a quality college education. This has always been a key priority for me because it is critical to the future of our entire state. Improving affordability and access to education helps provide a solid foundation for Oklahoma’s workforce for decades to come. Furthermore, the positive impact a post-secondary education has for an individual’s lifetime salary earning potential has been demonstrated time and again.

In September 2007, I joined my colleagues in Congress in supporting the enactment of the largest college aid expansion since the GI Bill in 1944. The College Cost Reduction and Access Act (PL 110-84) will bring substantial savings to young Oklahomans seeking to start their career with a professional education and adult Oklahomans that wish to return to finish theirs.

Specifically, the Act provides more than $20 billion in federal student aid over the next five years. It cuts interest rates on need-based (subsidized) federal student loans from 6.8% to 6.0% this July 1st – making these loans more affordable for thousands of low- and middle-income Oklahoma students. This is the first step toward cutting these rates in half. Under the Act, between now and 2011 these rates will continue to decrease until they reach 3.4%.

Nationally, the interest rate cut will benefit 6.8 million students. In addition to the student loan interest rate cut, for the 2008-2009 academic year the College Cost Reduction and Access Act will increase the Pell Grant scholarship by $490 – raising the maximum award to $4,731 per recipient. The Act will also provide $4,000 in up-front tuition assistance each year for students who commit to teaching high-need subjects in high-need public schools after graduation.

With the cost of getting a professional education growing each year, this expansion in college aid will have a direct affect on tens of thousands of Oklahomans. It will provide hundreds of thousands of dollars in savings to Oklahomans who need financial aid the most.

Congress has taken several short-term steps already this spring to stimulate the economy through tax rebates, to improve the slumping housing market that threatens the value of everyone’s home, and to extend unemployment benefits for those who are struggling to make ends meet after losing a job. However, given time broader solutions like the College Cost Reduction and Access Act will be just as important for the future health of Oklahoma’s job-force and statewide economy.

Also see: Democrats Using ‘New GI Bill’ to Subvert the War Effort