1) The Benefits:
The proposals would have borrowers pay no more than 15 percent of their discretionary income for federally backed student loans. They would allow such loans to be forgiven after about 25 years. The Senate measure would gradually boost the maximum Pell grant, the nation's main aid program for low-income students, from $4,300 to $5,400 a year. The House plan calls for a smaller grant increase but would cut in half the interest rates on federally backed student loans, to 3.4 percent.2) The Cost
The Senate version would cut subsidies to lenders by $18.3 billion; the House version would cut subsidies by about $19 billion...[Rep. George]Miller said in an interview that [DESPITE WHAT THEY SAY PUBLICLY], lenders have told lawmakers privately that they could accept the subsidy cuts, which are about the same as reductions President Bush proposed in his budget this year.