April 01, 2010

As Southern Tier Region Students Face Rising Tuition Costs, Student Debt At All Time High – Gillibrand Announces New Pell Grants For Nearly 70,000 NY Students

Health Insurance Reform Included Education Measures to Make College More Affordable for Students

Washington, DC – With student debt at an all-time high and students in the Southern Tier region facing rising tuition and fees, U.S. Senator Kirsten Gillibrand passed legislation to increase the amount of Pell Grant scholarships for nearly 70,000 New York students eligible for Pell Grants, opening the doors of higher education to more students.

The Health Care and Education Affordability Reconciliation Act that the U.S. Senate passed last week and President Obama signed into law on Tuesday included the measures to make college more affordable for all students.

Nearly 70,000 New York Students to be Eligible for More Generous Pell Grants
The legislation invests a total of $36 billion into the Pell Grant program over 10 years, including $22.6 billion to increase the maximum Pell Grant award from $5,550 next year to nearly $6,000 over the years ahead to help keep pace with inflation. This investment will allow approximately 67,500 New York students to be eligible for Pell Grants that provide need-based grants to low-income undergraduate and certain post-baccalaureate students to expand access to higher education.  Last school year, 6.2 million Americans relied on Pell Grants to help pay for college and career training. Nearly 90 percent of those students come from families earning less than $40,000 a year. 

In the Southern Tier, the average debt among graduates from the 2006-07 school year at two local institutions is approximately $10,000.

Institution

Average Debt Of Graduates
2006-07 School Year


Tuition and Fees
2006-07 School Year

Increase In Tuition
2005-06 – 2006-07

Davis College

$5,360

$11,530

$3,150

SUNY at Binghamton

$14,530

$5,910

$72

Source: The Institute for College Access & Success

“Higher education should be a ticket to personal and professional success, not a ticket to financial debt,” Senator Gillibrand said. “Every New York student deserves the opportunity to go to college and achieve their full potential, but the high cost of college and rising student debt are keeping too many of our students from pursuing their dreams. This historic legislation we fought so hard for will open the doors of higher education to tens of thousands of New York students, save taxpayer money, and create more opportunities for our students to succeed in the global economy.”

The Health Care and Education Affordability Reconciliation Act achieves the following additional reforms to make college more affordable and create more opportunities for New York students:

Saving Nearly $70 Billion in Student Loans, Keeping Jobs in America

The legislation makes all student loans delivered through the Direct Student Loan program, instead of subsidizing private banks and lenders through the costly Federal Family Education Loan Program. Cutting subsidies to third-party private entities will save taxpayers approximately $68 billion by 2020, and pass these savings onto students. This will make lenders compete for contracts to service all federal student loans, guaranteeing borrowers high-quality customer service, and keeping jobs in America. Unlike loans made by banks, Direct Loans can only be serviced by workers in the U.S. Last year, for instance, Sallie Mae brought 2,000 jobs back to America to win a direct loan servicing contract.

Investing Nearly $120 Million for New York’s Minority-Serving Colleges and Universities
The legislation invests in New York’s 29 Minority-serving colleges and universities that report an enrollment of a single minority group, or combination of minority groups, that exceed 50 percent of its total enrollment.

Make Federal Loan Repayment More Manageable

The legislation caps the amount that lenders can collect each month from borrowers at 10 percent of discretionary income for new borrowers after 2014, down from 15 percent.

$45 Million to Keep NY Students in School and On Track to Graduate
The legislation invests $750 million in the College Access Challenge Grant program, including nearly $45 million for New York alone, to provide services that expand access to higher education for low-income students and help them manage their student loans, including financial literacy and debt management education.

Prepare Students for the Jobs of the Future
$2 billion in competitive grants will be available for community colleges that develop and improve education, or career training programs to prepare students for the jobs of the future, and help workers retrain with the new skills they need to continue advancing their careers.