The House of Representatives voted 253 to 171 yesterday to expand the amount of federal aid to students by ending subsidies to private lenders.
Under the Student Aid and Fiscal Responsibility Act, approximately $80 billion over the next 10 years would shift from the pockets of private lenders to government aid such as Pell Grants and increased investment in community colleges.
Forty billion dollars of the funds are dedicated to raising the maximum annual Pell Grant. Currently set at $5,350, that number would increase to $5,550 in 2010 and to $6,900 by 2019. Starting in 2011, the scholarship will be adjusted with the cost of living, based on data from the Consumer Price Index.
The bill would require all colleges to convert to the federal Direct Loan program by July 1, 2010.
Other allocations in the bill include $10 billion for community colleges and $2.55 billion for historically black colleges and universities.
The act will proceed to the Senate, where Democratic leaders expect it to pass, according to The New York Times.
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