Bills in Brief

With rising tuitions increasingly putting the pinch on middle income families, Congress passed a handful of measures in '07 designed to ease the cost of sending little Joey to college. Below is snapshot of the bills the House and Senate considered with what was finally passed.

In the House

The House kicked things off in 2007 with a bill to halve interest rates on federally subsidized loans - from 6.8% to 3.4% - saving families about $2,300 each. The cut in rates will be phased in over a couple of years, but then pop back to 6.8% levels in 2012. The bill first has to be okayed by the Senate before becoming law. (WP)

A more comprehensive bill, passed in July, would cut $19 billion in subsidies to tuition lenders over 5 years and instead put $18 billion to more direct benefits for students, including raising the maximum Pell grant to $5,200 (up from $4,700), offering $4,000 in yearly tuition support for future public school teachers, forgiving $5,000 in loans for graduates going into public service and capping student loan payments at 15% of income. (NYT & WP & WP)

Senate-side

The Senate's also okayed a bill, S 2669, that would increase the maximum size of Pell grants (from $4,050 to $5,400) and cap loan payments at 15% of borrowers' annual income - paying for it all, as does the House bill, but cutting subsidies to private lenders. (WP) Unlike the House bill, the Senate doesn't cut interest rates for student loans. (WP)

In a second bill, senators voted to keep an eye on tuition hikes and on sweet deals made between lenders and financial aid officers - as well as to simplify the application for financial aid for low income families (NYT).

The final bill

Congress sent the president a final bill in September '07. In it, maximum Pell grants were hiked to $5,400, graduates who entered civil service jobs for ten years got their loans forgiven, loan payments were capped at 15% of a grad's income and interest on federally backed loans was whittled down to 3.4% - all paid for by $12b in cuts to subsidies for private lenders. (WP & NYT)

In the budget

In the meantime, Pell grants may get a boost as part of a 2007 budget bill which would raise the ceiling for grants by $260 to $4,310. (NYT)

Also as part of the budget, Congress is taking aim at subsidies for student loan providers, possibly cutting subsidies by as much as $22 billion. Private lenders may take another hit from Congress, which is half way to barring loan companies from giving universities any perks in exchange for getting on the "preferred provider" list (WP).

Updated September 9, 2007

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