The big headline of the health care bill was, we health care. But receiving less publicity but something that was a landmark in its own right was the reform of the student loan program. There hasn’t been much progress on student loans in the last few decades but Obama’s reform closes some loopholes and attempts to make repayment easier for recipients. Check out a timeline of the bill here. Here are a couple of the features from the bill:
- Eliminates fees paid to banks by the government, saving over $60 billion over 11 years
- Invests $2 billion in community colleges
- Expands Pell grants by 200,000 and increases then total to $5,975
- Starting in 2014, payments capped at 10% of income rather than 15%
- Loans forgiven after 20 years instead of 25 years (and only 10 years if you are in public service)
The bill on the surface is very beneficial to students and their families and will hopefully drive more students to higher education. I was shocked to learn that this bill only passed the House with a vote of 220-207. It seems that Sallie Mae, the largest supplier of student loans, spent some $3 million trying to lobby against changes in the student loan industry. Some opponents event went so far as to call it “nationalizing” the industry. This is hardly nationalizing an industry that already received plenty of government support. College just got a little more affordable for people that actually need it.
