WASHINGTON, DC— With the recent credit crunch making it tougher for many students to get loans to pay for college, U.S. Senator Jack Reed (D-RI) joined with Ted Kennedy (D-MA) in introducing a bill to ensure Rhode Islanders continue to receive critical federal aid to pay tuition bills. The Strengthening Student Aid for All Act of 2008 will help ensure that students from middle and low income families have the best and most affordable options available to pay for college.

"More than 13,100 students in Rhode Island relied on federal Pell Grants in 2005-2006 to help pay the cost of college tuition. Additionally, over 82,000 federal loans were given to students attending Rhode Island institutions that year. This critical legislation will help ease the financial burden on families and students and ensure that our children have the resources they need to go to college," said Reed, a senior member of the Health, Education, Labor and Pensions (HELP) Committee, which oversees federal education policy.

The Strengthening Student Aid Act reduces the need for students to take out expensive private loans by increasing access to guaranteed low interest Federal student loans. The bill would increase federal loan limits by $1,000 annually for dependent undergraduate students and by $2,000 annually for independent undergraduate students.

The bill also reduces low-income families' reliance on loans by increasing the maximum Pell Grant for the lowest-income Pell grant recipients by up to $750 above the maximum award or $4,731 for the 2008-2009 school year. This builds on landmark legislation Senator Reed helped author and pass in September to make it easier for more students to qualify for student financial aid by ensuring that all students from families with incomes of $30,000 or less receive a maximum Pell Grant.

The credit crunch is making it more difficult for lenders in the federal student loan program to raise the capital to make loans. This legislation allows the federal government to intervene so that banks and student loan companies can continue their service to students.

"Rhode Islanders and Americans across the country are being squeezed financially from almost every direction. As the effects of the housing crisis ripple through our economy, college financial aid has become an even greater necessity. This legislation will help ensure that the credit crunch does not prevent deserving students from attending college," concluded Reed.