What does Obama signing a new student loan bill mean for you and your kids? And what are the positive and negative effects?
On a positive note, the bill could possibly mean the difference in you paying on a ridiculous loan for the rest of your life or having college almost fully funded for you. According to the White House,
— Pell Grants will rise from $5,550 for the coming school year to $5,975 by 2017.
— More eligible students will be able to get a full Pell Grant. Currently, most grants only go to students with family income below $20,000, but students with family income of up to $50,000 will also be eligible.
— Some college graduates will have an easier time repaying loans. The government will essentially guarantee that workers in low-paying jobs will be able to reduce their payments. Current law caps monthly payments at 15 percent of these workers’ incomes; the new law will lower the cap to 10 percent.
A White House press release spells it out this way, “All new federal student loans will be direct loans, delivered and collected by private companies under performance-based contracts with the Department of Education. According to the non-partisan Congressional Budget Office, ending these wasteful subsidies will free up nearly $68 billion for college affordability and deficit reduction over the next 11 years.”
On a negative note, some officials are angry over this bill. Why?
Free market analysts estimate that the bill will kill around 35,000 private-sector jobs – work that would be assumed by federal employees. Republican lawmakers said that, the plan will make the government charge other students more for the loans to help pay for the nearly $1-trillion health care bill, which was signed into law on Tuesday, Mar. 23.
What are your opinions?