WASHINGTON (MarketWatch) -- The White House said it would veto a college-cost-reduction bill that made its way to the House floor Wednesday, claiming that it fails to help the neediest college students and creates programs with long-term costs for taxpayers.
The College Cost Reduction Act of 2007 would boost college financial aid by about $18 billion over the next five years and cut federal subsidies to lenders in the college-loan industry. The proposed legislation would also invest in minority institutions, control repayment rates and create loan-forgiveness programs, among other actions.
Under the act, the maximum value of the Pell Grant scholarship would increase by $500 over the next five years. The act would also cut interest rates on need-based student loans to 3.4% from 6.8%.
More from Pedro de la Torre of Campus Progress:
This is wrong headed for a few reasons. While the increase in need-based grant aid is, in my opinion, the most important part of the bill, the increasing debt burden that graduates face needs to be addressed.