On Tuesday, March 30, 2010, Barack Obama signed a bill which, unbeknownst to many, will benefit numerous students nationwide; democrats, libertarians, and republicans alike. Along with the Health Care and Education Reconcilliation Act of 2010, our government has granted us landmark student aid reform.
To quote the Delaware Democratic Party, “Over the next decade these reforms will save taxpayers $68 billion by ending wasteful subsidies given to banks and middlemen who handle student loans. The money this program saves will expand and strengthen the federal Pell Grant program and make college more affordable for millions of middle class Americans.”
The act passed by the House and Senate is a huge step forward for students and the American Economy. This isn’t just one of your ordinary bills, passed by Democrats, which fit like a puzzle piece into their agenda. This act will affect numerous students, easing the stress of their financial burdens, and even aiding in beginning to ease our nation’s financial deficit.
Years ago, the United States had the highest concentration of graduates in the world, however, in the past decade, we have begun to lose ground, and are now ranked ninth or tenth in the world. With a greater number of well-educated people, America will be more skilled as a whole, and this will allow us to better compete in the 21st century. President Obama has set a goal to regain our top spot by 2020, and with this new bill, that goal is made even more feasible.
It gets harder every year for students who rely on federal loans and aid to make ends meet, and when students can’t afford higher education, the entire nation’s economy suffers. These subsidies which are being taken from private bankers will be redirected to Pell Grants… Pell Grants that will make college more affordable, and ease the stress on students who must attempt to balance full-time jobs and college courses just to stay afloat.
According to the Governor of Virginia, Tim Kaine, this is the single largest investment in higher education in US history. For those of you who are just entering the financial aid scene, here’s a recap on what’s going to be changing.
According to CNN, for the 2009-2010 school year, the maximum Pell Grant awarded to students was $5,350. Without this reform, that would have been more than cut in half per student, and would have been $2,150 per student. With this, the grant will grow to $5,975 by 2017.
Community college students will see a lot of the benefits from this as more money will be allocated for competitive grant programs, and they also will see the benefits of the Pell Grant increase.
For those of you who have already taken out loans in the past, you’re also affected.
The monthly payments will be capped at 10% of your discretionary income, allowing you to get a more stable base beneath you, and maybe even save up more for your future. Something else that you may see appearing is the decrease of interest rates for student loans, with the switch over to completely direct lending.
I’m sure, though, that some of you are still unconvinced.
As Katie Naranjo, president of the College Democrats of America said, “We’re lucky to have a president and congress who listen to young people and our issues. Today, many students will have the opportunity to receive a better education, and the next generation of young professionals now have a manageable stystem to pay back their loans.”
What about easing the concerns of the Republicans who are understandably leery of increasing government spending at a time when our economy is faltering? The deficit and spending are being reduced through this bill! It’s going to save taxpayers $68 billion from the subsidies that were going to be paid to financial institutions, and $10 billion will be paid towards our deficit.
“I didn’t stand with the banks and the financial industries in this fight – that’s not why I came to Washington – and neither did any of the members of Congress who are here today,” President Barack Obama said to a supportive crowd at Northern Virginia Community College, the location of the signing. “We stood with you. We stood with America’s students.” I would say that it’s a great feeling to know that our future is indeed important to our government.



Houghton Arpt, MI