BY-NC-SA While diving into the new Credit CARD Act I asked, “what ever happened to legislation making more student loans available directly from the government?”
And the last I heard, the lobbyists for major private student lenders were stalling that one. Well Obama isn’t going let this slip though the cracks. Our President is still working to overhaul of federal student loan programs. By combining the new student loan programs with Democratic Healthcare reform into an expedited budget reconciliation bill (or as like to call it, the SUPER DUPER REFORM bill), it can be passed with a majority vote instead of the "necessary" 60% or more vote.
The bill would end government payments to private, commercial student lenders, leaving the government to lend directly to students. It would also redirect billions of dollars to expand the Pell grant program for low-income students, and to pay for other education initiatives.
[And] federal education officials warned on Thursday that if Congress failed to act, millions of students might see their Pell grants cut by 60 percent.
There are two main reasons to package these programs together. One: it saves the financial student loan bill, that many believe wouldn’t have a chance without the health care reform. Two: it attempts to persuade health care reform opposition by offering aid to their students. Some senators who have strong ties to private lenders are now in a sticky situation.
This loan reform will help stimulate the government; they will be making money off of each loan they receive while not charging crazy interest rates. An estimated “$87 billion [will be saved] by eliminating payments to private lenders “and that savings could go towards more Pell Grants. If this bill passes it assures Americans that their government is on their side, and wants to help them stay out of major debt from health care cost and student loans.
This is an extreme relief for college students like me, who are stressing with how next year's tuition will be paid. If this passes students struggling to get jobs over the summer, working during school, and filling out endless pages for grants and scholarship can take a breath.
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