The Student Aid and Fiscal Responsibility Act Makes College More Affordable for Students and Families and Saves Tax Payers $87 Billion
WASHINGTON, D.C. – Today Congresswoman Lois Capps voted to make the single largest investment in financial aid to help students and families pay for college-- and at no new cost to taxpayers. Passed by a vote of 253 to 170, the Student Aid and Fiscal Responsibility Act (SAFRA) (H.R. 3221) will expand access to an affordable college education to more American students, transform early education opportunities, and build a world-class community college system while additionally saving tax payers $87 billion. Passing SAFRA is an important step in improving the American education system in order to build a stronger, more competitive American economy and to save taxpayers money.
“Ensuring that all Americans have the financial resources to go to college and get the skills and job training necessary to get a good paying job is a smart investment for our country,” said Capps. “This is an important step in rebuilding our economy and ensuring that our work force remains the most highly skilled, cutting-edge and effective in the world. I’m also pleased that while making these important investments in our country’s future we’ve also been good stewards of the taxpayers’ money, saving an estimated $87 billion through reforms to the student lending program that eliminate wasteful spending.”
This bill is a major step forward in President Obama’s initiative to make sure America leads the world in college graduates by 2020. SAFRA will reform the system of federal student loans to save the taxpayers $87 billion and will direct $10 billion of those savings back to the U.S. Treasury to reduce entitlement spending. SAFRA will change the way the student loan system functions by originating new loans through the government’s Direct Loan program, but will maintain competition among private lenders and non-profits to provide top-notch customer service for student borrowers. This simple change will make college loans more reliable for students and families -- and ensure that loans operate in the best interests of borrowers by reducing many of the potential conflicts of interest that exist in the current loan system.
“For years private lenders had carte blanche to issue student loans and, left unchecked, they wasted taxpayer dollars and failed to provide a fair deal to students and their families,” said Capps. “This commonsense reform is long overdue, and I’m proud to join President Obama and my Democratic colleagues in standing up for the American taxpayer by eliminating billions in waste and dramatically expanding access to essential education and job training opportunities.”
With the largest-ever investment in higher education, this bill will also significantly increase government grant and loan assistance for college tuition payments. Pell Grants, already distributed to more than 7 million students, will increase to $6,900 by 2019 from $5,350 today and made more widely available. In the 23rd Congressional District over 6,800 additional students are estimated to receive Pell Grants. SAFRA also keeps interest rates low on government-subsidized loans, makes substantial investments in early childhood education, expands the Perkins low-cost loan program to every U.S. College, and simplifies the process of applying for student financial aid.
