Students on financial aid will get more federal assistance under a bill passed by the Senate last week that President Clinton is expected to sign soon.

Titled the Higher Education Act, the bill will expand the Pell grant program for needy students, cut interest rates for student loans and provide additional assistance for students going into teaching.

"Our goal in this bill is to strengthen federal support for higher education," said Sen. Edward M. Kennedy '54-'56 (D-Mass.) "This legislation expands access to college for all qualified students."

The bill passed by a vote of 96 to 1. A similar bill passed through the House of Representatives in May.

If signed into law, the Higher Education Act will increase Pell grants from $2,000 to $5,000 for the 1999-2000 school year. Grants would continue to increase until 2003, at a cap of $5,800.

The bill also forgives up to $8,000 of student loans for teachers who work at least three years in needy schools.

"The continued health and strength of our nation depends on our country's ability to improve the education of our young people," said Sen. Jim Jeffords (R-Vt.), who chairs the Labor Committee that sent the bill to the full Senate. "Integral to that is the strength of our nation's teaching force."

Also under the new bill, students who carry more than $30,000 in debt will have 25 years to pay it back, instead of the 10 years they now have.

The Senate also agreed to subsidize banks that make student loans, a controversial move that was opposed by many senators, including Kennedy.

The subsidies will allow banks to drop loan interest rates from 8.23 to 7.43 percent--which translates to savings of $650 to $3,200 for students--but will cost taxpayers up to $3.6 billion over five years, according to the Congressional Budget Office.

"The bill offers a sweetheart deal to the banks," Kennedy said in a statement. "Bank receipts will go down only slightly from the excessive receipts they receive under the high interest rates now in effect."

The Senate bill differs from the House version in several respects. A provision allows welfare recipients to count a second year of college or vocational school as fulfilling the work requirement of the welfare law.

Under the 1996 welfare reform bill, states must meet welfare-to-work goals to keep federal funding of their welfare programs.

Currently, the law allows states to count only one year of college as work. The Senate bill will give them the option to add a second year.