Backgrounder: The Student Aid And Fiscal Responsibility Act
Facts You Should Know
- Tuition and fees have increased more than 60 percent (adjusted for inflation) since just 2000.
- Average student debt is now over $23,000, a 24 percent increase since 2004.
- In the 2008-09 academic year, student borrowing grew about 25 percent over the previous year, to $75.1 billion.
- The U.S. now ranks near the bottom among industrialized nations in the percentage of 25-34 year olds with an associate’s degree or higher.
- One in five American students pursuing a bachelor’s degree never finish.
- In 1977, the maximum Pell Grant covered 77 percent of total public college costs. Now, it has dropped to 32 percent.
- Between 1.4 million and 2.4 million bachelor’s degrees would be lost this decade among college-qualified high school graduates as a result of financial barriers.
The Student Aid and Fiscal Responsibility Act seeks to provide relief to millions of students, parents and workers struggling to obtain a college degree or training for a better job.
The maximum Pell Grant would increase to $5,500 in 2010 and $6,900 in 2019 as a result of a $40 billion investment in the program. As a result, several hundred thousand more students would qualify for aid and, with that, the opportunities that a degree will afford them.
The Perkins Loan program would be strengthened under SAFRA. These are low-cost loans available to adults, and the legislation would allow students who need additional aid to work with their schools to get these loans from the federal government instead of risky private loans.
Community colleges and worker retraining get new funding under SAFRA. The United States is projected to have a shortfall of 16 million college graduates by 2025. SAFRA will revitalize community colleges by updating facilities and creating free and accessible online curriculum, as well as building partnerships between schools and businesses.
All federal student loans would be awarded through the Direct Loan program as a result of SAFRA. That more efficiently utilizes the government’s education dollars. This reform in studentlending eliminates borrowers’ dependence on market conditions, while also saving $87 billion to invest back in education support and reducing the deficit.
SAFRA would keep interest rates low for lower income students and their families who qualify for subsidized Stafford loans by applying a variable rate beginning in 2012, rather than increasing them from 3.4 percent to 6.8 percent.
The Free Application for Federal Student Aid (FAFSA) form would be simplified. By reducing the number of questions on the form, students and families would encounter fewer potential roadblocks to their getting aid.
Finally, historically black and minority-serving institutions would be boosted with a $1.2 billion investment under SAFRA to support college access and completion among disadvantaged students.