College students nationwide may soon see a significant decrease in their student loan debts, as new legislation increasing the financial aid available to low-income students is in the process of becoming enacted. On Sept. 19 Congress passed the College Cost Reduction and Access Act, which President Bush has promised to sign into law.

The act will gradually increase the maximum Pell Grant award. The Pell Grant is the nation’s foremost grant program, awarding money to 5 million students from low-income families every year. The current limit on the award is $4,310 dollars per academic year, and that will be increased to $5,400 by 2013.

The increase in Pell Grant awards will be especially beneficial to SUNY students, according to Sandra Alvarez, an intern for the New York Public Interest Research Group at Binghamton University.

‘SUNY students pay such a low tuition that even a small increase in Pell Grants could have a big effect,’ she said.

Tuition charges for an undergraduate New York state resident attending BU are currently $4,350 per academic year.

The act’s benefits will extend beyond those who are eligible for a Pell Grant. Interest rates on student loans will be significantly reduced; a change that will affect over 5 million middle-income students who are borrowing subsidized Stafford Loans.

The act will establish an income-based repayment program that would determine loan repayment plans based on the borrower’s profession and income. Borrowers will pay 15 percent of any income they make above 150 percent of the poverty line, which is currently approximately $15,000. The program will prevent recent graduates with small salaries from owing payments they cannot afford.

‘It’s an investment in America’s future,’ said Alvarez.

Alvarez added that this will provide many students with a greater variety of career choices upon graduation. Students will be able to choose careers based on their interests without having to worry about their ability to repay student loans with their future salaries.

BU students currently graduate with an average of $14,734 in student loan debt. Alvarez emphasizes that this average should soon be lower for all students, not just the neediest.

‘These changes will affect a large portion of students at Binghamton,’ she said.

Dennis Chavez, director of financial aid at BU, agrees that the College Cost Reduction and Access Act is a step in the right direction, although it does not solve students’ problems completely.

‘What will be interesting to watch is how and if lenders will pass on [the lower] costs to students. Unfortunately, unless annual lending levels go up, and they are not expected to, students will continue to look at other less desirable loans as their only other option,’ he said.

After the act has passed into law, all students will automatically be considered for these benefits as part of the Fafsa (Free Application for Federal Student Aid) application process.