In what is the fourth major legislative victory for Democrats this year, the House and Senate today both approved with veto-proof margins a bill to cut federal loan interest rates and boost student aid by $20 billion.
Specifically, the bill will increase the maximum Pell grant, which goes to the poorest college students, from $4,310 a year to $5,400 a year by 2012 and will cut interest rates on federally backed student loans to poor and middle-class students from 6.8 percent to 3.4 percent over the next four years. The bill also sets up a loan-forgiveness program for college graduates who work for 10 years in public service professions, such teaching or nursing and caps annual payments for students at a percentage of their income.
President Bush had previously threatened a veto, but the White House said today he would sign it. The legislation will begin taking effect on October 1st.