As Boston University increases its total cost for students even farther above $50,000 for the 2010-11 school year, students may find some relief in an overhaul of the student loan system that was signed into law as part of the health care reconciliation bill by President Barack Obama Tuesday.
The bill eliminates government subsidies to private banks, instead making millions of students get their loans directly from the Department of Education.
The bill is expected to save taxpayers more than $60 billion, money that will instead be redirected to education programs in the form of an expansion of Pell Grants and increased aid to community colleges.
“For almost two decades, we’ve been trying to fix a sweetheart deal in federal law that essentially gave billions of dollars to banks to act as unnecessary middlemen in administering student loans,” Obama said in a speech following the passage of the bill.
“Those are billions of dollars that could have been spent helping more of our students attend and complete college, that could have been spent advancing the dreams of our children, that could have been spent easing the burden of tuition on middle-class families.
Instead, that money was spent padding student lenders’ profits.”
However, BU spokesman Colin Riley said the new system will not have a sizable effect on BU because it has always been a direct-loan school.
“I don’t see this causing any change at Boston University,” he said. “We have been a direct loan school since the program’s inception and it has worked very well here at the university. We’ve been a proponent of it since the beginning and we’ve always felt it benefitted the students.”
At the same time, Riley also said changes may be seen by students who are eligible for Pell Grants if funding is increased as expected.
“For those students who are Pell Grant eligible, any greater amounts of money going into the system will benefit those students,” Riley said.
Despite funding increases, some argue that the change does not do enough to combat rising tuition costs.
“The government needs to increase the amount of money it is allocating to students,” said College of Engineering senior Arup Roy.”Students need more funds, and I don’t think it’ll hike up the deficit.”
ENG freshman Nadeem Bakr said the government should also focus on monitoring tuition rates.
“The government should investigate that colleges are trying to cut costs and make sure they aren’t raising their tuitions if they think students will be getting more funding from the government,” Bakr said.
But College of Communication sophomore Grant Garson said anything being done to help make college more affordable is better than nothing.
“If the loan reform gives students more money, then obviously it’s a good thing,” he said.”Tuitions are ridiculous,, $53,000 is way too much.”
Still, Riley said, an increased government focus on making education affordable could only be beneficial for everyone.
“Access and affordability are really important issues,” he said. “The more attention that Congress pays to them and the president and his administration pay to them, the better off students will be because making an investment in young people through continuing their education benefits society as a whole.”
Staff writer Meaghan Beatley contributed in the reporting of this story.
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