September 27, 2021 marks the 14th anniversary of the College Cost Reduction and Access Act, which expanded Federal Pell Grants in order to make college more affordable for low- and moderate-income students. Enacted during the second Bush Administration, the legislation increased funding for Pell Grants by $11.4 billion in the first five years, as well as increased the maximum Pell award to $5,400.
A Brief History of the College Cost Reduction and Access Act
In 2007, college tuition and related costs had risen to over double the rate of inflation. Consequently, American student loan debt had risen to a staggering $85 billion dollars. As more students, especially those from underrepresented communities, struggled to afford tuition, financial aid offices were simultaneously steering students toward loan companies that charged inflated interest.
This unfair practice pushed Congress to pass both the Student Loan Sunshine Act in May 2007, and the College Cost Reduction and Access Act a few months later. Key provisions of the College Cost Reduction and Access Act included:
- Increased Pell Grants: Increased the maximum federal grant from $4,310 to $5,400 by 2012
- Income-Based Repayment: Created a program to ensure that past, present and future students who take federal loans will have fair and manageable payments
- Decreased Interest Rates: Phased in reduced interest rates on subsidized Stafford loans for undergraduate students
- Public Service Loan Forgiveness: Forgave loan balances for borrowers who spent at least 10 years working in eligible public service professions and made income-based payments through the Direct Loan program
Since this legislation’s passage, there have been increased efforts to make college more affordable for students from all backgrounds. In particular, philanthropist Robert F. Smith has been a champion in creating initiatives that mitigate student loan debt in the Black community.
Robert F. Smith’s Commitment To Make College More Affordable
In 2019, Smith made headlines for donating $34 million dollars to Morehouse College to clear the student debt for 400 graduates and their families. With Black college graduates typically owing $7,400 more in loan debt than their white peers, Smith has pledged to reduce student loan debt nationwide, particularly at HBCUs.
Following this donation, Smith and the Fund II Foundation, of which Smith is the founding director and President, launched InternXL, a paid internship program that matches marginalized students with STEM-related internship opportunities at a wide range of businesses, including AT&T, Price Waterhouse Cooper, Deloitte, Citi and Vista Equity Partners. Since its creation, the program has matched more than 12,000 students with invaluable career opportunities.
Most recently, Smith started Student Freedom Initiative, a nonprofit organization dedicated to addressing disproportionate student loan debt by offering alternatives to high-interest loans for students attending nine participating HBCUs. The initiative will officially launch in fall 2021 with this first cohort of schools (with more to be added each year), and will offer all students tutoring and career help as well as income-based loan alternatives to eligible STEM majors at participating schools.
Learn more about Smith’s efforts to reduce student debt for students of color.