Congress passes historic student loan bill
Dave Balson
Opinion Editor
President Obama signed into law the most extensive overhaul of student aid in 40 years on Thursday, March 25. The program is expected to save the government $61 billion over 10 years. The savings will be used to boost Pell Grants, lower interest rates and approve more loans, according to the Associated Press.
The legislation removes banks from the federal student loan program. Since 1965, banks used federal subsidies to make student loans, making the profits while the government assumed most of the risk. Now all loans will come directly from the U.S. Department of Education.
Of the $61 billion savings, $36 billion will provide more students will be awarded larger Pell Grants. Starting 2014, monthly payment caps on low-income graduates will be reduced from 15 percent to 10 percent of their incomes and any remaining debt will be forgiven after 20 years, costing the government $1.5 billion, according to the Washington Post.
The bill will also be used to fund education programs, providing $2 billion to community colleges for job training.
A CNN/Opinion Research poll released March 25 shows 64 percent of respondents supported the education overhaul, while 34 percent opposed it.
The program was part of, and overshadowed by, the health care reconciliation bill. The bill passed the Senate 56-43, then passed the House 220-207 before being sent to the president. No Republicans voted for the bill.
Opinion Editor
President Obama signed into law the most extensive overhaul of student aid in 40 years on Thursday, March 25. The program is expected to save the government $61 billion over 10 years. The savings will be used to boost Pell Grants, lower interest rates and approve more loans, according to the Associated Press.
The legislation removes banks from the federal student loan program. Since 1965, banks used federal subsidies to make student loans, making the profits while the government assumed most of the risk. Now all loans will come directly from the U.S. Department of Education.
Of the $61 billion savings, $36 billion will provide more students will be awarded larger Pell Grants. Starting 2014, monthly payment caps on low-income graduates will be reduced from 15 percent to 10 percent of their incomes and any remaining debt will be forgiven after 20 years, costing the government $1.5 billion, according to the Washington Post.
The bill will also be used to fund education programs, providing $2 billion to community colleges for job training.
A CNN/Opinion Research poll released March 25 shows 64 percent of respondents supported the education overhaul, while 34 percent opposed it.
The program was part of, and overshadowed by, the health care reconciliation bill. The bill passed the Senate 56-43, then passed the House 220-207 before being sent to the president. No Republicans voted for the bill.
"...will provide more students will be awarded larger Pell Grants." - brought to you by 3 a.m. deadline night.