Signed by President George Bush

Vote Smart's Synopsis:

Vote to pass a bill that makes changes to regulations and funding for student financial aid.

Highlights:

• Appropriates $33.60 billion to gradually increase Pell Grant amounts to $5,400 by 2012 and maintains funding through 2017 (Sec. 102).

• Incrementally lowers the current 6.8 percent interest rate for Federal Subsidized Student Loans and Federal Direct Stafford Loans every year until the rate is set at 3.4 percent for loans disbursed after July 1, 2011, and before July 1, 2012 (Sec. 201).

• Establishes an auction for each state to determine the lenders who will provide Federal PLUS Loans to colleges and universities in the state, to be held every two years in order to determine the two lenders with the lowest bids for special allowance payments (Sec. 701).

• Appropriates $57.00 million a year through 2011 for Upward Bound programs that did not receive funding in 2007 but have been given a grant score over 70 (Sec. 103).

• Creates $4,000 a year TEACH Grants to encourage teachers to take courses in mathematics, sciences, foreign languages, bilingual education, special education, reading, and other high-need fields and requires teachers to teach the subject they took courses in for at least four years (Sec. 104).

• Allows members of the military services to defer loan payments for up to 180 days after demobilization for Federal Family Education Loans, Stafford Loans, and Perkins Loans (Sec. 202).

• Allows loan forgiveness for employees who have made 120 monthly payments on student loans while employed in public service (Sec. 401).

• Raises the income protection allowance through 2013 to $6,000 for dependent students, $9,330 for single independent students without dependents or married independent students without dependents who are both enrolled in college, and $14,960 for married independent students where one is enrolled in college. Adopts a table detailing allowances for independent students with dependents through 2013 (Sec. 601).

• Raises the maximum income required to automatically attain a zero expected family contribution from $20,000 to $30,000 a year and adjusts the required income level in future years based on the Consumer Price Index (Sec. 602).

• States that if a borrower's income level is above 150 percent of the poverty line, student loan repayments can be capped at 15 percent of the amount that their income exceeds that rate (Sec. 203).

• Eliminates the "exceptional performer" status through which lenders are entitled to 100 percent payment of unpaid principles and interests from guaranty agencies (Sec. 302).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that makes changes to regulations and funding for student financial aid.

Highlights:

• Appropriates $33.60 billion to gradually increase Pell Grant amounts to $5,400 by 2012 and maintains funding through 2017 (Sec. 102).

• Incrementally lowers the current 6.8 percent interest rate for Federal Subsidized Student Loans and Federal Direct Stafford Loans every year until the rate is set at 3.4 percent for loans disbursed after July 1, 2011, and before July 1, 2012 (Sec. 201).

• Establishes an auction for each state to determine the lenders who will provide Federal PLUS Loans to colleges and universities in the state, to be held every two years in order to determine the two lenders with the lowest bids for special allowance payments (Sec. 701).

• Appropriates $57.00 million a year through 2011 for Upward Bound programs that did not receive funding in 2007 but have been given a grant score over 70 (Sec. 103).

• Creates $4,000 a year TEACH Grants to encourage teachers to take courses in mathematics, sciences, foreign languages, bilingual education, special education, reading, and other high-need fields and requires teachers to teach the subject they took courses in for at least four years (Sec. 104).

• Allows members of the military services to defer loan payments for up to 180 days after demobilization for Federal Family Education Loans, Stafford Loans, and Perkins Loans (Sec. 202).

• Allows loan forgiveness for employees who have made 120 monthly payments on student loans while employed in public service (Sec. 401).

• Raises the income protection allowance through 2013 to $6,000 for dependent students, $9,330 for single independent students without dependents or married independent students without dependents who are both enrolled in college, and $14,960 for married independent students where one is enrolled in college. Adopts a table detailing allowances for independent students with dependents through 2013 (Sec. 601).

• Raises the maximum income required to automatically attain a zero expected family contribution from $20,000 to $30,000 a year and adjusts the required income level in future years based on the Consumer Price Index (Sec. 602).

• States that if a borrower's income level is above 150 percent of the poverty line, student loan repayments can be capped at 15 percent of the amount that their income exceeds that rate (Sec. 203).

• Eliminates the "exceptional performer" status through which lenders are entitled to 100 percent payment of unpaid principles and interests from guaranty agencies (Sec. 302).

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that makes changes to regulations and funding of federal student financial aid.

Highlights:

• Repeals existing tuition sensitivity provisions, which limit Pell Grant awards for students attending lower-cost schools [Title I (sec. 101)].

• Appropriates $32.9 billion from fiscal year 2008 through fiscal year 2017 for PROMISE grants to low-income and high-need students that are eligible for federal Pell Grants [Title I (sec. 102)].

• Increases authorized deferments for federally insured student loans, interest subsidies, direct loans, and Perkins loans from three years to six years of economic hardship [Title II (sec. 201)].

• Limits monthly payments on loans to 15 percent of discretionary income [Title II (sec. 203 [c (2 [c])].

• Reduces the percentage of student loans guaranteed by the federal student loan insurance program from 98 percent to 97 percent [Title III (sec. 301)].

• Decreases the loan guaranty agency collection fee from 23 percent to 16 percent of funds collected from loan defaults beginning October 1, 2007 [Title III (sec. 302)].

• Eliminates the "exceptional performer" status for lenders, which entitles them to 100 percent payment of unpaid principles and interests from guaranty agencies [Title III (sec. 303)].

• Increases the loan origination fee from 0.5 percent to 1 percent of principal on loans made after October 1, 2007 [Title III (sec. 305 [b])].

• Releases public servants with incomes of less than $65,000 a year from federal student loan obligations after ten years of repayment [Title IV (sec. 401)].

• Raises the income protection allowance to $6,000 for dependent students and $14,960 for independent students without dependents by 2013. Adopts a table detailing allowances for independent students with dependents through 2013 [Title VI (sec. 601)].

• Increases the maximum income required to automatically attain a zero expected family contribution from $20,000 to $30,000 a year [Title VI (sec. 602)].

• Creates a biennial competitive auction process by which eligible lenders submit bids for the right to originate and disburse federal PLUS loans [Title VII (sec. 701)].

• Makes it unlawful to carry out a death sentence on a pregnant woman [Title VII (sec. 702)].

• Expresses the sense of the Senate that the detainees at Guantanamo Bay should not be released into American society or transferred into American facilities [Title VIII (sec. 801)].

Full Bill Text

Vote Smart's Synopsis:

Vote to pass a bill that makes changes to regulations and funding for student financial aid.

Highlights:

• Appropriates $20.16 billion dollars authorized for Pell Grants for the fiscal years 2008-2017 and increases student Pell Grant award eligibility by $200 each award year during the 2008-10 academic years, $300 in 2010-2011, and $500 in 2011-2012 and each subsequent academic year (Title I (sec. 101 (b))).

• Increases the maximum Pell Grant award to $7,600 for the 2008-09 academic year, $8,600 for 2009-10, $9,600 for 2010-11, $10,600 for 2011-12, and $11,600 for 2012-13 (Title I (sec. 101 (b))).

• Repeals existing tuition sensitivity provisions, which reduce Pell Grant eligibility for students attending lower-cost schools (Title I (sec. 101 (d))).

• Reduces interest rates on Stafford and other federally backed loans from 6.8 percent to 3.4 percent over the period from 2008-2013 (Title I (sec. 111 (a))).

• Increases aggregate limits on federally insured loans from $23,000 to $30,500 for undergraduate students and from $65,500 to $73,000 for graduate and professional students (Title I (sec. 112 (b))).

• Reduces the percentage of student loans guaranteed by the federal student loan insurance program from 98 percent to 95 percent (Title I (sec. 115 (a))).

• Lowers the loan guaranty agency collection fee from 23 percent to 16 percent of funds collected from loan defaults (Title I (sec. 116)).

• Increases the loan origination fee from 0.5 percent to 1 percent of principal on loans made after October 1, 2007 (Title I (sec. 118)).

• Provides for $5,000 in loan forgiveness over a period of five years for those employed in areas of national need, including early childhood educators, nurses, librarians, foreign language specialists, highly qualified teachers in bilingual education or in low-income schools, child welfare workers, speech-language pathologists, those engaged in national service, school counselors, and public sector employees (Title I (sec. 131)).

• Releases public servants from federal loan obligations after 120 payments over ten years of repayment (Title I (sec. 132)).

• Limits monthly payments on loans to 15 percent of the amount by which the borrower's adjusted gross income exceeds 150% of the poverty line (Title I (sec. 133)).

• Provides for complete loan forgiveness for those who have experienced a period of economic hardship lasting over twenty years (Title I (sec. 133))

• Appropriates $60 million for the fiscal years 2008-2012 to institutions that have less than average annual tuition increases or guaranteed tuition to be used for additional grants from the schools for students who are also eligible for Pell grants (Title II (sec. 202)).

Full Bill Text

Full Bill Text