Add U.S. Sen. Barack Obama, D-Ill., to the list of those who want the new Democrat-controlled Congress to make major improvements in federal financial aid policy for low-income students.
Obama joined U.S. Sen. Edward Kennedy, D-Mass., on Monday to introduce legislation that would increase the maximum Pell Grant by 25 percent, to $5,100. The maximum grant has remained stagnant at $4,050 for the past four years.
“The dreams of our nation’s youth increasingly require a college diploma, but that diploma is becoming ever more difficult to attain,” said the first-term senator and likely 2008 presidential candidate. The problem is not lack of ambition but “lack of any realistic way” for many families to pay for college.
To pay for the changes, the Kennedy-Obama bill would encourage colleges to participate in the Direct Loan program, through which the federal government provides loans to students. Kennedy said this option is much less costly than the Federal Family Education Loan program that relies on the private sector.
Privately funded loans cost about $6 more per $100 loan compared with the Direct Loan program, he said. Once colleges switch to Direct Loans, they can keep their savings and use this money to provide higher Pell Grants.
Obama said he introduced his first bill on college affordability soon after being elected to the Senate because the topic had come up often in his state.
“As college costs increase, financial aid lags,” he said.
