Passes House Today
Congresswoman Tammy Baldwin (WI-02) joined a majority (253-171) today in passing H.R. 3221, the Student Aid and Fiscal Responsibility Act. This landmark legislation is the single largest investment in college student financial aid in history and at no cost to taxpayers.
“The Student Aid and Fiscal Responsibility Act will put us on the path toward achieving President Obama’s goals of leading the world in college graduates by 2020 and preparing our students to be competitive in a global economy,” explained Congresswoman Baldwin. “This is great news for Wisconsin students and their families and an innovative way to help pay down the national debt. It’s a win-win situation all around,” said Baldwin whose district includes UW campuses in Madison, Baraboo and Whitewater, Beloit College, Madison Area Technical College and Blackhawk Technical College.
The Student Aid and Fiscal Responsibility Act is transformational in that it:
- Helps more students graduate with less debt. Over the next ten years, the legislation invests more than $499.7 million in Wisconsin, including $ 56.4 million in south central Wisconsin, to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $6,900 by 2019. In south central Wisconsin, 12,446 students will be eligible for a Pell Grant award in the 2010-2011 academic year.
- Stabilizes and safeguards the federal student loan program that students and families depend on to pay for college. Families shouldn’t have to worry about roller coaster fluctuations of the financial markets that hurt their access to low-cost student loans. By originating all new federal loans through the cheaper Direct Loan program, students and parents will be able to receive the exact same loans with the added assurance that these loans are entirely reliable, no matter what happens in the economy. This simple change will save taxpayers $87 billion over 10 years according to the Congressional Budget Office.
- Builds on the best of what works in the private sector to provide borrowers with top-notch customer service. The legislation will allow state non-profit lenders and private industry to continue doing what they do best – servicing loans. It will allow private entities to compete for contracts to service these loans – ensuring that students get the best services available and maintaining jobs in communities across the country.
- Creates new grant programs for community colleges to renovate and modernize infrastructure, improve instruction and student support services, and implement other innovative reforms that will lead to higher completion rates in degree and certificate programs. This means more well trained graduates to fulfill local workforce needs.
In addition, the Student Aid and Fiscal Responsibility Act:
- Invests $3 billion nationally to bolster college access and completion support programs for students. It will increase funding for the College Access Challenge Grant program, resulting in at least $ 2 million a year for the next five years in Wisconsin, and will also fund innovative programs in states and at institutions that focus on increasing financial literacy and helping retain and graduate students.
- Expands the Perkins Loan program, a campus-based program that provides low-cost federal loans to students;
- Keeps interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012. In 2008, students in Wisconsin borrowed 156,792 subsidized student loans.
- Makes it easier for families to apply for financial aid by simplifying the FAFSA form and allowing students and families to apply for aid using the information on their tax returns.
The legislation now moves to the Senate for further action.
