Under the heading of – “What have you done to improve things, Democrats?”
Congress has sent President Barack Obama a vast rewrite of federal college aid programs.
The legislation will give more needy students access to bigger college Pell Grants and make it easier for many future borrowers to repay their government-backed loans.
The House passed the measure 220-207 as part of an expedited bill that also fixes provisions in the new health care law. Earlier Thursday, the Senate passed the measure 56-43.
The bill, an Obama domestic priority, strips banks of their role as middlemen in federal student loans and puts the government in charge.
With the savings, the government would increase Pell Grants to needy students. It would also increase money to historically black colleges and community colleges.
Thousands of schools that had relied on private lenders to issue federally guaranteed student loans must switch by July 1 to direct lending from the U.S. Education Department. Many are already doing that. Interest rates will be unaffected. Proponents of guaranteed student loans say private lenders have provided students with better service than the government. But many financial aid administrators and government officials disagree.
— More than half of the estimated $61 billion in savings over 10 years reaped from the lending overhaul would be channeled into student aid: $36 billion for Pell Grants for needy students. The maximum Pell award would rise from $5,550 in the next school year to a projected $5,975 by 2017, with the grants linked for the first time to the consumer price index in 2013.
— Recent college graduates who qualify for loan repayment relief would get more help. Currently, the income-based repayment program allows borrowers to cap monthly federal student loan payments at 15 percent of discretionary income and forgives the remaining balance after 25 years. The bill would lower that cap to 10 percent for new borrowers after 2014 and forgive remaining debt after 20 years, costing the government $1.5 billion.
— The bill would also provide $2.55 billion to support historically black colleges and universities and minority-serving institutions; $2 billion for community colleges; and $750 million for a college access and completion program for students.
This Bill was packaged as part of the Health Care Reform “fixes”, and as such it isn’t entirely fair to point out every single Republican in the Senate voted against it…
That $61 billion in “savings” is the part that was being raked off by banks acting as intermediaries.
The $2.55 Billion to HBCU’s is a welcome change in view of conservative efforts to re-segregate non HCBU schools through legal blackmail and end diversity efforts. However, the Minority Community, as well as legislators should not let up the pressure on those HBCUs whose graduation rates are under-performing. Those schools need to step up their game, step up the quality of their programs, and devote significant effort into making sure that the kids who attend their schools have the tools necessary to complete their education.