College Cost Reduction Act Will Incentivize, Invest in Higher Education (Rep. Mazie Hirono)

Last week I worked with the Education and Labor Committee to pass the College Cost Reduction Act of 2007 — a bill that will make the single largest investment in higher education since the GI bill, at no cost to taxpayers. It passed out of committee by a vote of 30 to 16.

The bill would increase college financial aid by nearly $20 billion over the next five years by cutting interest rates on student loans, increasing and expanding grants for students with financial needs, and providing loan forgiveness as an incentive to begin a career in public service.

The bill includes the initiative I introduced last Monday via the Early Childhood Educator Loan Forgiveness Act of 2007. It provides substantial loan forgiveness to people who earn a degree in early childhood education and go to work in a preschool or child care center in a low income community. The College Cost Reduction Act of 2007 provides $1,000 toward loan forgiveness for each of the first five years of work in an eligible school or center. In addition, if a worker’s loan is through the federal government’s direct loan program, the bill provides complete loan forgiveness after 10 years of work (so long as the worker had been keeping up with loan payments).

Scientists, economists, teachers, and parents tell us that we must invest in our country’s future by funding increased access to high quality early childhood education. In most states, including Hawaii, there are not enough qualified early education teachers to provide opportunities for every child. This is largely due to the substantial economic barriers to earning a B.A., which often leaves the graduate with thousands of dollars of debt. This debt makes it hard to enter a field in which she or he will earn less than many workers with only a high school degree. As recent graduates see it, these numbers just don’t add up. This bill will take an important first step to solve this problem.

The College Cost Reduction Act also includes incentives to encourage other types of public service. It provides loan forgiveness for first responders, law enforcement officers, firefighters, nurses, public defenders, librarians, and others.

The bill would boost investment in education without adding cost to taxpayers by cutting excess subsidies paid by the federal government to the largest private lenders in the student loan industry.