The U.S. House of Representatives in July passed the College Cost Reduction Act of 2007, H.R. 2669, by a vote of 273-149.

This legislation, which cuts subsidies to lenders by nearly $19 billion and directs the savings to students, provides the single largest increase in college aid since the GI Bill of 1944, thanks in part to AFT members who sent 1,182 letters to 267 House offices.

The bill increases the maximum Pell Grant award by $500, cuts the interest rate on federal student loans in half (to 3.4 percent) and provides other forms of relief for borrowers in unmanageable debt situations. It cuts the lender subsidies by half a percentage point and extends tuition assistance and/or loan forgiveness to students who commit to working in high-need education and public service fields.

The Senate is considering a similar bill. President Bush is already threatening to veto the compromise legislation.