New Student Loan Reform Will Improve Student Funding

obama educationLast 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.






6 Responses to “New Student Loan Reform Will Improve Student Funding”

  1. Karen says:

    Some students haven’t developed debt management skills or assumed they would get a great, high-paying job after graduation. Some loans may be forgiven due to economic hardship. Other loans could be consolidated for a more manageable monthly payment.

  2. Finding the Best Deal on Student Health Insurance | Edu in Review Blog says:

    […] inquire about your parent’s health insurance plans. For the first time, thanks to the new health care legislation, parents can keep their graduate-student children on their corporate insurance plans or opt for […]

  3. •According to the President, this new student loan reform will save taxpayers more than $68 over the next decade says:

    Doubles Pell Grant – free money? Pays wages and health care for the 30K private jobs lost? Only requires payments of 10% of annual income – which either increases the term of the loan which equals more interest for the student, or writes off the balance of the debt? Can we check the math?

  4. Sallie Mae Discouraged Over New Education Reform Act | Edu in Review Blog says:

    […] New Student Loan Reform Will Improve Student Funding […]

  5. President Obama Signs New Education Reform Act | Edu in Review Blog says:

    […] of Northern Virginia Community College, President Obama signed into effect the Health Care and Education Reconciliation Act of 2010. This act was “two major victories that will improve the lives of our people for generations to […]

  6. Clifton Magouliotis says:

    There are people who rush to take quick loans not knowing the short-term implications of such a move or even without having an elaborate plan on how to utilize the money for maximum benefits, only to see their property fall under the auctioneer’s hammer.


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