The College Cost Reduction and Access Act, which former President George W. Bush signed in 2007, will take effect July 1, reducing the interest rates of student loans by .68 percent and increasing the Pell Grant maximum by $1,000, according to the National Association of Student Financial Aid Administrators.

The act intends to cut interest rates of student loans in half by 2012.

Despite the University’s plans to cut its budget by 5 percent, the act ensures students’ protection in financing their education.

Julie Rice-Mallette, director of the Office of Scholarships and Financial Aid said there will actually be an increase in federal financial aid funds available for 2009-10.

“While other areas of the economy are being negatively impacted, the University is anticipating increases in state and institutional support,” she said. “It hopes the increase will be sufficient to meet the rising demands for financial aid.”

Rice-Mallette said she is unsure if the funds available will be sufficient to meet demand.

Ashley Hudson, a sophomore in First Year College who received a Federal Stafford loan, said the government should continue running the act.

“If the government spent the money elsewhere, it would not bring a major change right now,” she said. “But in education it helps individual families a lot.”

Sarah Johnson, a freshman in psychology, said the act could be improved by creating the availability of funds to an even broader spectrum of students.

“With today’s economy, higher education is becoming even more unrealistic than before,” Johnson said. “Anything the government can do to help support students should be done now. People going to school and getting specialized careers will serve the country’s economy in the long-run.”

Alison McCoy, a statistics administrative support associate, said she agrees that funding education is the best way the government can spend its money right now.

“Investing in education is a better return of American money,” she said.

McCoy compared The College Cost Reduction Act to the G.I. Bill, which provided college education for returning World War II veterans.

“The money spent then was returned multiplied,” she said.

However, McCoy disagreed with The College Cost Reduction Act’s forgiveness of loans 20 years upon graduating, if economic hardship is proved.

“Those receiving loans need to understand that loan money is borrowed, hence, it needs to be paid back and go to the next person,” McCoy said.