Welcome back Gauchos! I hope all of you had a great summer and I offer a special welcome to all students who are new to UCSB. As many of you know, UCSB holds a special place in my heart. My husband Walter was a professor here for many years, my son graduated from the university and I am a proud alumna of the Gevirtz Graduate School of Education.
I want to applaud all of you, and your families, for demonstrating the commitment and drive necessary to attend one of the nation’s premier institutions of higher learning. I know that beyond the excellent academic credentials you needed to gain acceptance to UCSB, many of you and your families also had to overcome significant financial hurdles to attend the university.
Unfortunately, the cost of a college education is more expensive than ever. In the last five years alone, college costs have grown nearly 40 percent. Sadly, every year some 200,000 students in America do not attend college because they can’t afford the high cost. Those who do attend are graduating from college with more debt than ever before. At UCSB, the average student borrower has over $15,000 in student loans when he or she graduates. These burdensome costs for students and families are making access to a better life through education more and more difficult for many of our best and brightest young minds to achieve.
Fortunately, help is on the way. Democrats in Congress have long recognized that access to an affordable quality education is one of the cornerstones of our country. Higher education is critical to the future competitiveness of the United States in the larger global economy. Last fall Democrats ran on a platform of change, and one of our key commitments to the people included making college more affordable and accessible for all Americans.
I am pleased to report that just last month we delivered on this promise, passing the largest increase in student aid since the 1944 GI Bill. This new law, the College Cost Reduction and Access Act, will boost financial aid by more than $20 billion over the next five years. To reduce the cost of loans for student borrowers, the legislation will cut interest rates in half on need-based student loans. Interest rates will drop from 6.8 percent to 3.4 percent over the next four years. Once fully implemented, this will save the typical student borrower $5,000 over the life of the loan. This legislation will also prevent student borrowers from unmanageable levels of federal debt. It will guarantee that students will never have to spend more than 15 percent of their yearly discretionary income on loan repayments.
This new law will also provide a long overdue increase in the maximum Pell Grant scholarship students can receive. It will initially raise the scholarship by $490 in 2008 and by $1,090 over the next five years. This will restore the purchasing power of the Pell Grant, raising the scholarship from $4,050 in 2006 to $5,400 by 2012. That in turn will benefit the 5.5 million students receiving Pell Grants.
The College Cost Reduction and Access Act also includes a number of other provisions. These provisions will ease the financial burden for students and families by encouraging careers in public service, like nursing and police work. The incentives include providing tuition assistance of $4,000 per year for four years to undergraduates who commit to teaching in public schools located in high-poverty communities or high-need subject areas. The new law provides loan forgiveness after 10 years of public service by military service members, first responders, law enforcement officers, nurses, public defenders, prosecutors, early childhood educators, librarians and others.
More importantly, this won’t increase the national debt, because we pay for it by cutting excessive federal subsidies to the college loan industry by $20.9 billion.
I hope you’ll agree with me that the College Cost Reduction and Access Act is one of the most critical new laws the 110th Congress will enact. I’m proud this legislation will soon help make college more affordable and accessible for thousands of students here at UCSB and millions of students across the country.
I look forward to joining UCSB students today at noon in front of the UCen as we celebrate this sound investment in our students and our country’s future. Please join us if you can.