Sen. Tom Harkin went to Grand View College on Monday to praise a bill aimed at making college more accessible to low-income students and helping graduates with heavy loan debt.
Harkin voted for the College Cost Reduction and Access Act, approved by the Senate and House on Sept. 7 and now awaiting President Bush’s signature. Bush previously objected to some elements of the bill but has indicated he would sign it.
Speaking at a news conference at the Des Moines college, Harkin said he wanted to halt rising loan interest rates and boost federal grants to relieve the debt the now burdens students upon graduation.
“College has become a distant and unattainable dream for millions of Americans. And for millions more who are fortunate enough to attend college, they graduate with two things a college diploma and a mountain of debt,” he said.
Harkin said the bill would:
Gradually increase the federal Pell Grant amount per year until 2012, when it would total $5,400. Students do not have to repay this money.
Reduce the amount of government subsidies paid to private lenders like Sallie Mae, JP Morgan and Citibank as well as non-profit agencies that administer federal loans.
Set a cap for federal student loan repayment to 15 percent of a borrower’s income. That means one’s monthly payments could decline.
Drop federal student loan interest rates each year, until they reach 3.4 percent in 2012. The current rate for federal loans, such as the Stafford loan, is between 6 percent and 6.8 percent.
Forgive remaining loan debt to those who work for a decade in a public service career, such as teaching, nursing, law enforcement, social work, public interest law and public library services.
Kent Henning, president of Grand View College, said institutions such as his school that have large nursing and education programs are concerned when students opt out of those careers because of daunting loan debt.
“Our society does not always reward people in those professions with the highest incomes,” he said. “We’re losing qualified candidates for some of these very important non-profit and public sector jobs.”
Banking industry officials have argued that the cuts in government subsidies could adversely affect services provided to borrowers, but Harkin said the reduction was needed.
“We have thrown tens of billions of dollars at the private loan program despite the fact that the direct loan program is cheaper and more effective,” Harkin said.
If signed by President Bush as expected, the legislation will begin taking effect Oct. 1.
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