Starting Tomorrow, Paying For College Gets A Little Easier
June 30, 2009
“The Ninth District is home to some first-class colleges and universities, but for too many the dream of a higher education has been out of reach. With college costs skyrocketing out of control, we have the responsibility to do everything we can to help students and parents afford tuition,” Congressman Cohen said. “At a time when recent college graduates are struggling to find a job in this economy, these new benefits will provide a little bit of financial breathing room each month.”
Starting tomorrow interest rates on federal student loans will drop from 6 percent to 5.6 percent. This is the second of four annual cuts in this interest rate; it will continue to drop until it reaches 3.4 percent in 2011. Nationwide, about 5.5 million students take out subsidized student loans each year.
To help current or future borrowers who are struggling to make their loan payments, a new Income-Based Repayment program will also begin tomorrow. Under this new plan, eligible borrowers would be able to cap their monthly loan payments at just 15 percent of their discretionary income, which is defined as 15 percent of what a borrower earns above 150 percent of the poverty level for their family size.
After 25 years in the program, borrowers’ remaining loan balances, including interest, will be completely forgiven.
“Pell Grants are an invaluable resource to many families,” Congressman Cohen said. “Higher Pell Grants coupled with the Tennessee lottery scholarship, a program I fought for over two decades to bring into fruition, will have an enormous effect on all Tennesseans pursuing a higher education or seeking advanced training at professional schools.”
Congressman Cohen, who has been recognized as the father of the Tennessee lottery scholarship, particularly applauded the increase in Pell Grant scholarships, which are aimed at helping low- and moderate-income students afford college.
Starting tomorrow interest rates on federal student loans will drop from 6 percent to 5.6 percent. This is the second of four annual cuts in this interest rate; it will continue to drop until it reaches 3.4 percent in 2011. Nationwide, about 5.5 million students take out subsidized student loans each year.
To help current or future borrowers who are struggling to make their loan payments, a new Income-Based Repayment program will also begin tomorrow. Under this new plan, eligible borrowers would be able to cap their monthly loan payments at just 15 percent of their discretionary income, which is defined as 15 percent of what a borrower earns above 150 percent of the poverty level for their family size.
After 25 years in the program, borrowers’ remaining loan balances, including interest, will be completely forgiven.
“Pell Grants are an invaluable resource to many families,” Congressman Cohen said. “Higher Pell Grants coupled with the Tennessee lottery scholarship, a program I fought for over two decades to bring into fruition, will have an enormous effect on all Tennesseans pursuing a higher education or seeking advanced training at professional schools.”
Congressman Cohen, who has been recognized as the father of the Tennessee lottery scholarship, particularly applauded the increase in Pell Grant scholarships, which are aimed at helping low- and moderate-income students afford college.
As a result of increased funding, in both the College Cost Reduction and Access Act and the American Recovery and Reinvestment Act, the maximum Pell Grant scholarship for the upcoming 2009-2010 school year will be $5,350 – more than $600 above last year’s award. About 6 million students receive this scholarship each year.
“Those who choose to become a first responder, nurse, public defender, educator, or join the military should be rewarded for their service. Forgiving their student loans is a way to show our gratitude,” Congressman Cohen said.
Finally, Tennesseans will be able to enter into new public service forgiveness created under the law. College graduates who enter public service professions will have their federal college loans completely forgiven after ten consecutive years of service and loan repayments.
The changes were included as part of the College Cost Reduction and Access Act, which Congressman Cohen voted to enact in 2007. The legislation invested $20 billion in college aid for families, at no additional cost to taxpayers.
“Those who choose to become a first responder, nurse, public defender, educator, or join the military should be rewarded for their service. Forgiving their student loans is a way to show our gratitude,” Congressman Cohen said.
Finally, Tennesseans will be able to enter into new public service forgiveness created under the law. College graduates who enter public service professions will have their federal college loans completely forgiven after ten consecutive years of service and loan repayments.
The changes were included as part of the College Cost Reduction and Access Act, which Congressman Cohen voted to enact in 2007. The legislation invested $20 billion in college aid for families, at no additional cost to taxpayers.
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________________________Steven Broderick
Communications Director
Congressman Steve Cohen (TN-9)
1005 Longworth House Office Building
Washington, DC 20515
Direct: 202-226-7916
Main: 202-225-3265
steven.broderick@mail.house.gov
Issues:Education