Yesterday, President Barack Obama signed the Health Care and Education Reconciliation Act of 2010, a health care add-on that includes an attached provision to allow for college students to get bigger Pell grants and make the government a more primary issuer of student loans.
The overhaul of the student lending process will cut banks out of the government-backed student loan business by ending federally subsidized private loans and routing all aid through public money with direct federal student loan funding. Colleges and universities must move from private lenders into the direct lending program by July 1.
Though many universities have already switched to the direct lending program in anticipation for the new law, and some of the immediate changes might not be visible, what will be noticeable is the $68 billion taxpayers will save over the next 10 years, the more than $40 billion will go toward Pell Grants that will go to low- and moderate-income families, and increases in the maximum amount awarded ($5,975 from $5,550 between 2013 and 2017). Other noticeable changes that will start July 1, 2014 are decreased percentages on payments based on income after graduation, incentives for government and public service jobs and broader loan forgiveness.
And while Obama acknowledged that the cost of college will not go down because of the bill, he urged that universities nationwide continue to “do their part” to hold down costs.
But is it enough?
College costs will continue to rise, even as more federal aid will be available. Though this is a good step in the right direction, it does nothing to fix the problem of making higher education more affordable, especially when a college education continues to become more and more necessary in job searches these days.
It is nice that the government is acknowledging the problem with the costs of higher education, but more needs to be done. There is no cure-all to this problem of making college more affordable, but more than a just reminder for colleges and universities to keep costs down needs to enacted &- hopefully sooner rather than later.
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