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Bill Would Make College More Affordable

July 15, 2009, 11:59 AM

President Barack Obama's plan to dramatically increase college student aid has taken its first step in Congress.

House Education Committee chairman George Miller has introduced a bill that would boost Pell Grant scholarships for low-income students by linking them to inflation for the first time. It would be paid for by eliminating a massive program of subsidies for private college loans.

Lenders oppose the idea, but Education Secretary Arne Duncan says the government should be investing in the students and not the banks doing the lending.

Eliminating the subsidies would save an estimated $87 billion.  While more than 6 million students and parents received loans under the subsidized program, it's begun to crumble amid the credit crisis. Hundreds of lenders have stopped making federally backed loans.

Besides funding the college loans, $10 billion of the savings would go toward early childhood education, increasing the number of poor children with access to pre-kindergarten, among other things.

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