Obama administration hopes to make college more affordable

Mina Yu, Online Editor
April 9, 2010
Filed under News

The Health Care and Education Reconciliation Act that was passed and signed into law on March 30 will affect students by making college more affordable. The legislation is made up of six parts and will take effect beginning in 2014. The following are highlights from the legislation:

Larger Pell Grants

Federal Pell Grants, also known as Basic Education Opportunity Grants, is basically money given away by the government to lower-income families that need assistance when sending their children off to college. This, like many grants are given through the Free Application for Federal Student Aid (FAFSA).
The new Health Care and Education Reconciliation Act will invest more than $40 billion in Pell Grants to make sure that these awards will be increased each year. As colleges both public and private have been raising their tuition, the government investments will more than double the total amount of funding. According to the non-partisan Congressional Budget Office, the maximum award will go from $5,550 to $5,975 from 2013 to 1017.

More Stable Funding for Pell Grants

Pell Grants often falls short because of the growing number of students that qualify for the award go back to school. The new act plans to put the program on more secure footing for the future.

Investments in Community Colleges

As community colleges currently enroll more than 6 million students a year, the Obama administration plans to give over $2 billion over four year to community colleges. Because community colleges feature affordable tuition, open admission policies, flexible course schedules, and convenient locations, community colleges often receive less money and spend more.

Increased Support for Minority Serving Institutions (MSIs)

America’s Historically Black Colleges and Universities (HBCUs) and Minority Serving-Institutions (MSIs) are especially hit hard with increasing costs and deteriorating facilities.  To battle this, the Health Care and Education Reconciliation Act plans to provide $2.55 billion in mandatory funding for these institutions.

Expanded Income Based Repayment (IBR)

New borrowers after July 1, 2014 are able to cap their student loan repayments at 10 percent of their discretionary income. If borrowers continue to pay off the debt at a steady rate for 20 years, their balance will be forgiven. Special public workers like teachers, nurses, and those involved in the military get this time reduced to 10 years.

Student Loans that Put Students First

Currently, according to the Congressional Budget Office, the government gives up a chunk of money to ensure that financial institutions make guaranteed student loans. But beginning in July, all fdereal student loans will be directly from the government. Over $68 billion can be given away in the next 11 years just by eliminating middle men when giving out student loans.  

Information from: www.whitehouse.gov/issues/education/higher-education