Doubling investments in Pell Grants: We’ve raised the maximum Pell Grant award to $5,635 for the 2013-14 award year—a $905 increase since 2008. Over that same time, the number of Pell Grant recipients has expanded by 50 percent, providing college access to millions of additional low-income and middle-class students across the country. This landmark investment in the Pell Grant was enacted in the Health Care and Education Reconciliation Act of 2010, which ended student loan subsidies for private financial institutions and banks and shifted over $60 billion in savings back to students.
Helping students manage loan debt: The “Pay as You Earn” plan expands income-based repayment to enable 1.6 million students to take advantage of a new option to cap repayment of student loans at 10 percent of monthly income—an option that student borrowers can begin to use at the end of this year. These changes will reduce the burden of student loans in a fiscally responsible way. Additionally, millions of borrowers are now eligible to consolidate Direct Loans and FFEL Loans and save up to half a percentage point on their interest rate.
Expanding education tax credits: My administration established the American Opportunity Tax Credit in 2009 to help families with the costs of college, providing up to $10,000 for four years of college tuition for families earning up to $180,000. Over 9.4 million students and families benefit from the American Opportunity Tax Credit each year. I’ve called on Congress to make this tax credit permanent and prevent it from expiring in 2012.