The maximum will continue rising annually — to $5,975 by 2017— to keep up with the rising costs of college. The increase is a result of the health care reform and budget reconciliation legislation Congress passed in March.
“This is another important step toward making college affordable and accessible,” said Kilili.
“College tuition just keeps going up. So we have to make sure Pell Grants keep up with those rising costs and give some much-needed relief to families that are struggling to provide a better future for their children.”
Pell grants are generally available on a sliding scale to undergraduate students from low to moderate-income households.
The House Committee on Education and Labor, of which Sablan is a member, estimates that college students in the Northern Marianas will see an additional $4.4 million in Pell Grants over the next decade as a result of the changes in the law. More students will also be able to receive the grants due to an increased amount of funding available.
The scheduled funding increases will continue until 2017, and from there the maximum grant amount will be pegged to the Consumer Price Index to ensure that student aid keeps up with rising prices.
In addition to the increased scholarship aid, there are changes coming into effect this month that will make federal student loans more affordable. Interest rates will drop from 5.6 percent to 4.5 percent this month.
“Education can be expensive, but it is also one of the best investments families and individuals can make. So, we want to be sure that paying for college doesn’t mean putting students and their families over their heads in debt.”
Starting in 2014, new borrowers who are eligible for the Department of Education’s Income-Based Repayment Program will have their federal student loan payments capped at 10 percent of their discretionary income to ensure the payments are manageable. After 20 years of repayment, the balance of federal student loans will be forgiven.
The funding for these improvements comes from originating new student loans directly with the U.S. Department of Education and eliminating the subsidies paid to banks and other private lenders to make these loans.
“One of the reforms in the reconciliation bill we passed this spring gets rid of the middleman in the student loan program,” Kilili said.
“By doing away with these subsidies, the federal government saves about $61 billion over the next ten years. That makes it possible to increase Pell grants and lower the cost of borrowing for college, helping students and families make ends meet while investing in education.”
H.R. 4872, the Health Care and Education Reconciliation Act, passed as part of the legislative package that included health care reform and was passed earlier this year. No Republicans voted for the improvements in aid for students.
“The Pell grant and student loan provisions all began in the Student Aid and Fiscal Responsibility Act of which I was one of 22 original co-sponsors,” Kilili noted.
“That bill, H.R. 3221, passed the House in September, but the Senate wasn’t moving on it.
“Not giving up and continually looking for ways to use the legislative process to achieve your goals is key to succeeding in Congress,” Kilili noted.
“So we rolled most of the important provisions into the H.R.4872, the Health Care and Education Reconciliation Act. And that bill became law in March.”
