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The legislation, an Obama domestic priority overshadowed by his health care victory, represents the most sweeping rewrite of college assistance programs in four decades. It strips banks of their role as middlemen in federal student loans and puts the government in charge.
The switch to direct government loans will result in savings to boost Pell Grants and make it easier for some workers to repay their student loans. In addition, some borrowers could see lower interest rates and higher approval rates on student loans.
The legislation has a wide reach. About half of undergraduates receive federal student aid and about 8.5 million students are going to college with the help of Pell Grants.
Sen. Tom Harkin, D-Iowa, praised the bill as a victory for middle-class families.
"Now they'll have the assurance that their kids will be able to afford to go to college and again, when they get out, they won't be burdened with a huge debt," Harkin said.
The changes do not go as far as Obama and House Democrats wanted. That is because ending fees for private lenders would save less money than they anticipated, according to budget scorekeepers. The bill is now expected to save $61 billion over 10 years.
Originally posted by jibeho
It will only encourage increases due to the new free flow of govt. dollars for everyone.
Originally posted by drew hempel
reply to post by guidanceofthe third kind
A Pell Grant is how much anyway -- $2000? A year of school including room and board is probably at least $20,000 even at a public university.
Yeah a quick google says max. Pell Grant is $5000 or so. Some tuition is under $10,000 -- 50% of so of schools but then you got room and board expenses.... books, transportation costs....
So you get 30% of the cost covered at most.