In 2007, the U.S. Congress approved, with my strong support, and the President signed into law a measure making the single largest investment in college financial aid since the 1944 GI Bill, helping millions of students and families pay for college.

Among its many provisions, the College Cost Reduction and Access Act provides for cutting in half the interest rates on need-based federal student loans by 2011, and on July 1, new benefits go into effect that will make student loan payments more manageable for millions of Americans.
The benefits include:

• Cheaper interest rates on need-based federal student loans: On July 1, the interest rates on subsidized federal student loans will decrease from 6 percent to 5.6 percent. This is the second of four annual cuts in this interest rate; it will continue to drop until it reaches 3.4 percent in 2011.

• Reasonable and affordable monthly college loan payments for borrowers: Also on July 1, a new Income-Based Repayment program will go into effect that caps borrowers’ monthly loan payments at just 15 percent of their discretionary income (15 percent of what a borrower earns above 150 percent of the poverty level for their family size). Any current or future borrower whose loan payment exceeds 15 percent of their discretionary income is eligible. After 25 years in the program, borrowers’ debt will be completely forgiven.

• Higher Pell Grant scholarships that cover the average tuition at public universities: Due to funding provided by the College Cost Reduction and Access Act as well as the American Recovery and Reinvestment Act, the maximum Pell Grant scholarship for the 2009-2010 school year will be $5,350—more than $600 above last year’s award.

In addition, students and borrowers will be able to continue to take advantage of other recent programs enacted under the law that will make it easier for graduates to go into public service fields while grappling with student debt.

To encourage more students to become teachers, the law provides up-front tuition assistance, known as TEACH Grants, of $4,000 per year—for a maximum of $16,000—to students who commit to teaching high need subject areas in high need schools for four years after graduation.

Recent surveys also show students’ interest in public service jobs is surging. Graduates who enter into public service careers, such as teachers, public defenders and prosecutors, firefighters, nurses, non-profit workers, and more, will be eligible for complete loan forgiveness after 10 consecutive years of public service and loan payments.

Families and individuals today too often face tremendous financial burdens in order to pay the costs of a higher education, and for too many a higher education is simply unaffordable. Yet in today’s global economy, a college degree is more important to one’s success than ever before and constitutes an essential starting point for many career choices and vocations. For these reasons, one of my highest priorities is making college more affordable for Southwest Virginia’s students.

Throughout my service in Congress I have strongly supported measures to increase federal funding for student loan and grant programs. I was pleased to support the College Cost Reduction Act in 2007, and I am now pleased that these benefits become effective July 1.

Rick Boucher is Congressman for the 9th District of Virginia, which includes the New River Valley. You can catch his Capitol Commentary regularly at newrivervoice.com.