Press Release - Clinton Measures to Address Student Lending Scandals and Help Student Borrowers and Non-Traditional Students Passed by Key Senate Committee
Higher Education Reauthorization Bill Now Goes to Senate Floor
Senator Hillary Rodham Clinton today announced that legislation approved by the Health, Education, Labor, and Pensions (HELP) Committee includes key provisions of bills she has introduced to address the recent student loan scandals, the need for increased transparency in student borrowing, and increased college access for low income and non-traditional students. The measures were approved as part of the Higher Education Access Reconciliation Act and the Higher Education Amendments of 2007 and will produce $17.3 billion in additional benefits for students, including critical help for low income New York students.
Too many borrowers in New York, and around the country, are lured into borrowing thousands of dollars from companies with questionable ties to financial aid offices. Too often these loans have the maximum interest rates attached to them. Furthermore, our students are not given timely information about their loans from their lenders. We must remedy this situation and remove the economic handcuffs our students are placed in by addressing the problems in the student loan industry and increasing grant aid to students in need," said Senator Clinton.
The legislation will increase Pell grants to $5100 immediately, providing over $200 million in increased grant aid to New York students for the 2007-2008 school year. The bill also raises the family income level at which a student is automatically eligible for the maximum Pell grant from $20,000 to $30,000. In addition, this bill creates a new loan forgiveness plan for public service employees, simplifies the financial aid application process and extends loan deferment for active duty service members.
The bill includes the following provisions from Senator Clinton's Student Borrower's Bill of Rights:
- Assistance for borrowers with disabilities: Allows disabled students to permanently discharge their student loans, with appropriate safeguards.
- Income sensitive re-payment program: Caps monthly loan payment that can be required of a borrower of a federal student loan at 15 percent of the borrower's discretionary income.
- Timely information: Requires lenders to provide borrowers monthly information about a borrower's loan, and pertinent information for borrowers in delinquency, default, or seeking to consolidate/reconsolidate. Accurate and comprehensive reporting to credit bureaus: Requires lenders to report student loans to credit bureaus as student loans, differentiating between student loans and other loans on credit reports.
Recent reports have exposed lenders and financial aid officers who have exploited our student loan system for their own benefit, leaving our young people saddled with enormous debts. Our students should have access to lowest cost loans possible and should be treated fairly as they repay their loans," Senator Clinton said.
Senator Clinton also secured approval of the following provisions from her Non-Traditional Student Success Act, which will make college more accessible and affordable for students who are older, working full or part-time, have children, or are the first in their families to go to college:
- Ending the Work Penalty: Raises the Income Protection Allowance (IPA) to allow working students to keep more of their income without losing crucial student aid.
- Support for Parents: Allows High School Equivalency Program and College Assistance Migrant Program (HEP-CAMP) funds to be used for child care and transportation.
- Support for Foster Youth: Expands the definition of independent students to include youth in foster care, aging out of foster care or emancipated minors.
In New York, the number of students who are 25 and older, who are attending school while raising their families and who are working full-time has grown dramatically over the past decade. This legislation will make it easier for adults to balance school and family so that they can improve their skills and increase their earnings," said Senator Clinton.
Senator Clinton has long been a champion of higher education and supporting college students. Two of the provisions from the Student Borrower Bill of Rights were enacted into law during the 109th Congress through the Emergency Supplemental Appropriations Act for Defense 2006. Two of the provisions from the previously introduced Nontraditional Student Success Act were also enacted into law through the Deficit Reduction Act of 2005.
Hillary Clinton, Press Release - Clinton Measures to Address Student Lending Scandals and Help Student Borrowers and Non-Traditional Students Passed by Key Senate Committee Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/293053