New Student Loan Reform Will Improve Student Funding
Last week, President Obama passed the historical Health Care and Education Affordability Reconciliation Act. Not only does this bill seriously alter access to health care, but it also significantly improves the way students can fund their post-secondary education.
Here are some of the most notable highlights of the bill.
- The new reconciliation bill ends the process of the federal government to give subsidies to private banks in order to distribute federally-insured loans. Instead loans will be administered by the Department of Education.
- According to the President, this new student loan reform will save taxpayers more than $68 over the next decade. In an attempt to make college more accessible to the middle and lower classes, the Pell Grant will be doubled.
- The current average student graduates college with an estimated $23,000 in debt due to student loans. But the initiative would make it much easier for students to afford loan payments. By the year 2014, the Obama Administration plans to cap a graduate’s annual student loan repayments at 10 percent of their discretionary income.
- In addition, community colleges will get a big boost in funding dollars as a way to maintain and improve upon the educational resource that community colleges all across the country provide to students, young and old.
- And finally, the Education Affordability Reconciliation Act intends to increase support to minority colleges, like the country’s historically black colleges and universities.
The driving force behind the legislation is to keep with the President’s promise of having the highest proportion of college graduates in the world.
On March 30, 2010, President Obama officially signed the health care and education reconciliation bill into law.