The Senate has passed a bill which will enable students on financial aid to receive more federal assistance. President Clinton is expected to sign the bill soon.
The Higher Education Act will cut interest rates for student loans, enhance the Pell Grant program for students on aid as well as provide monetary assistance for students going into educational fields of work.
The bill passed almost unanimously by a vote of 96 to one. The House of Representatives passed a similar bill in May.
"Our goal in this bill is to strengthen federal support for higher education," Sen. Edward M. Kennedy, D-Mass., told The Harvard Crimson.
The Higher Education Act seeks to increase Pell Grants from $2,000 to $5,000 for the 1999-2000 school year. Until 2003, grants would stop increasing at $5,800.
The bill will also allow aspiring teachers to not return up to $8,000 worth of student loans if they work at least three years in needy schools.
"The continued health and strength of our nation depends on our country's ability to improve the education of our young people," Sen. Jim Jeffords, R-Vt., who heads the Labor Committee that sent the bill before the full Senate, said.
In addition, the bill gives students 25 years, instead of 10, to pay back loans that amount to more than $30,000.
This, according to Kennedy, will significantly improve the current status of student aid.
In a hotly debated move, the Senate voted to subsidize banks that make student loans.
The subsidies will let banks drop loan interest rates from 8.23 percent to 7.43 percent. As a result, students will save between $650 and $3,200. Taxpayers will cover the rest -- $3.6 billion over the next five years, according to the Congressional Budget Office.
"The bill offers a sweetheart deal to the banks," Kennedy said in a statement. "Bank receipts will go down only slightly from the excessive receipts they receive under the high interest rates now in effect."
