What's New

On March 30, President Obama signed into law the Student Aid and Fiscal Responsibility Act, to make huge investments in financial aid by ending sweetheart deals with big banks and lenders.  Click here to read ‘What Does It Mean for Students.’

CLICK HERE to see the student activism from across the country that helped build support for this bill.
The passage of H. R. 4872 will finally give breathing room to students drowning in debt.  Highlights of the law include:

•  8 million students threatened with Pell grant cuts will instead see their grants stabilized and increased.

•  The maximum Pell grant will reach $5,975 by 2017.

•  Federal student loan borrowers can opt into Income Based Repayment, ensuring that they will never be required to repay at more than 10% of their salary, and offering full forgiveness after 20 years.

•  All federal PLUS loans for parents and graduate students will now be pegged at 7.9% interest, down from 8.5% interest.

•  Close to $5 billion in new funds for student support at community colleges and historically black colleges.

•  $60 billion cut from banks and lenders to pay for these new programs.

Overview

Society relies on our colleges to solve our social problems, graduating skilled people to become teachers, social workers, doctors, entrepreneurs and innovators who can improve our collective quality of life.  We also rely on college to offer opportunities to students from all socioeconomic backgrounds, acting as a force of fairness and equality.

To maintain this role, our Higher Education Project seeks to make student loan programs more affordable and efficient.

These days, college is practically a necessity.  But as states cut budgets, and grant aid has diminished, students are relying on loans to pay for college.  Today, the average student borrows almost $20,000 in student loans to pay for college.  In addition, nearly one-third of all students work more than 35 hours a week to pay for college, hindering their academic progress.  

To lower student debt, Congress passed a landmark piece of legislation in October 2007 that decreases student loan interest rates and creates new loan repayment programs designed to ease the repayment burden after graduation.

But more and more students are moving beyond financial aid to finance their degrees with private student loans.  Private loans are much riskier, bringing applicants in with low advertised interest rates but spitting them out with higher interest rates and record debt levels.

Worse, loan pricing targets lower income students with higher interest rates and penalty fees.  As a result, students with need based grants are graduating with the most debt, and debt with higher interest.  

Our project is working to protect students as consumers against the banks, make federal loans for parents more competitive toward private student loans, and give students more flexibility within the federal loan programs when their circumstances change, so they don’t need to turn toward banks for college financing.