Making College More Affordable

"We will provide the support necessary for you to complete college and meet a new goal: by 2020, America will once again have the highest proportion of college graduates in the world."

-President Barack Obama, Feb. 24, 2009

The Health Care and Education Reconciliation Act represents a historic investment in higher education – expanding educational opportunity for America’s students and families. The legislation strengthens the Pell Grant program, invests in community colleges, extends support for Historically Black Colleges and Universities and other Minority Serving Institutions, and helps student borrowers manage their student loan debt. It pays for these investments while reducing the federal deficit by ending government subsidies currently given to financial institutions that make guaranteed federal student loans.

Specific elements of the overall plan include:

Larger Pell Grants:

The Health Care and Education Reconciliation Act invests more than $40 billion in Pell Grants to ensure that all eligible students receive an award and that these awards are increased in future years to help keep pace with the rising cost of college. These investments, coupled with the funding provided in the Recovery Act and the President’s first two budgets, will more than double the total amount of funding available for Pell Grants since President Obama took office. The bill increases the Federal Pell Grant maximum award by the Consumer Price Index from 2013 through 2017, which is estimated to raise the award from $5,550 to $5,975, according to the non-partisan Congressional Budget Office. By the 2020-2021 academic school year, more than 820,000 additional Pell Grant awards are expected to be made as a result of to this new law. Read the fact sheet about Pell Grants.

More Stable Funding for Pell Grants:

The budgeting process for Pell Grants often leads to funding shortfalls. The current shortfall is particularly severe because of the large number of students and workers qualifying for the award that have recently gone back to school. The Health Care and Education Reconciliation Act covers the expected funding shortfall and much of the recent growth in Pell costs, putting the program on more secure footing for years to come. Read the fact sheet about Pell Grants.

Investments in Community Colleges:

As the largest part of the nation’s higher education system, community colleges enroll more than 6 million students and are growing rapidly. They feature affordable tuition,