President Obama signed legislation on Tuesday to expand college access for millions of young Americans by revamping the federal student loan program in what he called “one of the most significant investments in higher education since the G.I. Bill.”
The new law will eliminate fees paid to private banks to act as intermediaries in providing loans to college students and use much of the nearly $68 billion in savings over 11 years to expand Pell grants and make it easier for students to repay outstanding loans after graduating. The law also invests $2 billion in community colleges over the next four years to provide education and career training programs to workers eligible for trade adjustment aid after dislocation in their industries.
The law will increase Pell grants along with inflation in the next few years, which should raise the maximum grant to $5,975 from $5,550 by 2017, according to the White House, and it will also provide 820,000 more grants by 2020.
Students who borrow money starting in July 2014 will be allowed to cap repayments at 10 percent of income above a basic living allowance, instead of 15 percent. Moreover, if they keep up payments, their balances will be forgiven after 20 years instead of 25 years — or after 10 years if they are in public service, like teaching, nursing or serving in the military.
Creating better access to student loans is a crucial reform that will make it more affordable for millions of Americans to attend college. As much research has clearly demonstrated, a college education is clear way to access higher paying wages and therefore reduce poverty.
Read the full article at: http://www.nytimes.com/2010/03/31/us/politics/31obama.html?hpw
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