For the first time in more than 15 years, a historic higher education reform bill, the College Cost Reduction and Access Act (CCRAA), will end financial restraints that have haunted American college students.President George Bush signed the bill into law on Sept. 27. Under the CCRAA, the Pell Grant, which provides funding to 5 million low-income students annually, will increase. The current maximum payout per student is $4,310 annually. Starting in 2008, it will increase by $1,180 per year over the next four years, followed by $1,090 for each additional year. Students who receive Stafford Subsidized loans will benefit from lower interest rates. From 2008 through 2009, rates will drop from the current 6 percent to 5.6 percent. Another drop, to 3.4 percent, will occur in 2011 through 2012. The ‘Income-Based Repayment’ program will allow borrowers to make manageable payments according to income, meaning that as income increases or decreases, so will loan payments. U.S. PIRG is the federation of state Public Interest Research Groups. On the state level, PIRGs are non-profit, partisan advocacy organizations. U.S. PIRG’s Higher Education Project secures aid for students through additional grants, lowers debt and provides better service to students in the federal financial aid system. In a phone interview, Chris Lindstrom, director of U.S. PIRG’s Higher Education Project, said college loan debt has “finally hit a breaking point.” Low-income students who receive Pell Grants also need loans to pay for tuition and students who only receive loans need more loans. According to Lindstrom, 30 percent of students average $18,000 of college debt. She feels that every one of all social economic backgrounds should be able to attain a college degree and not be squeezed out of society due to lack of resources.During the next five years, the reform will generate $ 20 billion. Excess interest from loans that is used for enticing more students will be applied to the education aid program, eventually stopping banks from fostering bad credit behavior through loans, according to Lindstrom. “It’s restoring a promise the government made,” said Lindstrom. “If you attain a college degree, you will impact yourself and society.” According to Lindstrom, this reform will allow students to seek professions socially valuable to society, but have lower salaries Luke Swarthout, U.S. PIRG higher education advocate, said in a phone interview that the new act is a combination of policies that will consist of several provisions that will not only lower the interest rates for more than 5 million subsidized loan borrowers, but create a new loan forgiveness program for public services.In a phone interview, Pedro Morillas, CalPIRG, legislature advocate in the Sacramento office, hopes the federal act will shine light on two California State Senate bills: SB 832, the college textbook affordability act, which would force text publishers to display the prices of books upfront, when the professors order books for their classes; and AB 1548, the college textbook transparency act. This act would require publishers to list all revisions to the edition and list the wholesale price.Currently, publishers are not required to disclose textbook prices in advance. As a result, professors assign the textbooks before knowing the price. “An average student spends $900 a year on text books,” said Morillas. He also stated that the majority of professors said if they knew the cost of books up front, they would pick the lower-cost book.According to Marco De La Garza, dean of student services for Pierce College, CCRAA will help the consolidation process. Students often consolidate loans to avoid defaulting and as a result, the interest rate increases over time.
