June 30, 2009
Contact: John White, Press Secretary|
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Secretary of Education Arne Duncan announced that starting tomorrow $13 billion will be available for schools and that millions of current and former college students will benefit from better student loans and financial aid.
“July 1 is an important date in our efforts to reform schools and to make college accessible and affordable,” Duncan said in a telephone press conference. “We’ll be releasing important dollars to support schools reforms. We’ll be making tuition and student loans more affordable.”
On July 1, the Department will make more than $13 billion in fiscal 2009 available for the Title I program for disadvantaged students, the Individuals with Disabilities Education Act, the Improving Teacher Quality State Grants, and several other categorical programs supporting schools. The rest of the money from the fiscal 2009 budget will become available starting Oct. 1.
Although the federal government provides less than 10 percent of the funding for the average school district, the federal funds available ensure that districts will provide necessary and appropriate services to disadvantaged children and students with disabilities, Duncan said in the press conference.
Duncan also highlighted several changes to student aid and student loan programs that will make college more affordable to current students and student loans easier to repay for millions of former students.
Those changes include:
- The maximum Pell Grant will increase to $5,350 for the 2009-10 school year, 13 percent increase from last year.
- The payments for millions of people paying back federal student loans will fall as interest rates on their loans decrease.
- The fees to originate a new loan will fall by half of a percentage point. Next year, it will fall by that much again. The changes will free more money for those students to use for tuition.
- Borrowers also become eligible to reduce their monthly payments based on their income. People who are teachers or working in other forms of public service can reduce their payments based on their public service salary. After 10 years making payments, the remaining balance on their loans will be forgiven.
Duncan also discussed important developments for states in the American Recovery and Reinvestment Act, which provides $100 billion for education.
July 1 is the deadline for states to apply for the first round of funds from ARRA’s State Fiscal Stabilization Fund. To date, 37 states have received about $25 billion in funding from the stabilization fund. Duncan said he expects all states to apply for the funds and that the department will distribute all of the money from the first round of stabilization funding by mid-July.
Duncan also said he would publish a draft application for the $4.35 billion Race to the Top Fund in July. The $4.35 billion program will be to support states that are making substantial investments in school reforms.
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