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The Clarion | March 26, 2010
News
Health care overhaul bill affects student loan process
by Travis Wireback
Editor in Chief
APPROVED
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Regardless of
how you feel about
the healthcare
overhaul bill
signed by President
Obama, and passed
by the Senate this
week, there is
another portion of
the bill which is of
interest to students
that you may not know about.
While in the House of Representatives,
there was a new initiative added to the bill
which reformed much of the student loan
industry and provided more federal money
to prospective and current students.
In fact, the U.S. education secretary,
Arne Duime said about this part of the bill,
“Tonight’s vote in the House is a big victory
for America’s students.”
This vote actually saved many students
who likely didn’t even know that they
were in peril. The bill was written in order
to reform the Pell Grant program which
generally is granted
to lower-income
students. Before
the bill was passed,
however, it became
apparent that without a
major overhaul to the
Pell program, many
of those receiving aid
would lose at least
half of their financial
aid, and up to 500,000
recipients would be dropped from the
program for lack of funding.
Students and families working on paying
off Pell Grants will also see a benefit
in relation to their monthly payments.
Previously, families were asked to pay no
more than 15 per cent of their monthly
income to pay off the Pell Grant, and that
number ahs been reduced to 10%. Also, the
size of Pell Grants will increase about 500
dollars per student.
For other students not affected by the
Pell Grants, their benefit will be more
related to knowing where their loans are
actually held.
The main part of this reform brings all
student loans under federal control and
takes private lenders out of the process.
Because of this, students will know
exactly where their loans are held and the
process forgetting a loan will be greatly
simplified.
A downside to this, however, is that in an
economy with scarce jobs, this will cause
many private lenders to cut some jobs.
However, other legislators have said that
taking private lenders out of the equation
will be an economic boon to families.
Representative George Miller, Chairman of
the House Education and Labor Committee
said, “You’re taking billions of dollars in
wasteful subsidies to student lenders and
banks, and you’re recycling that money on
behalf of families and students to help pay
for their college education.”
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