President Obama signed the health-care reform bill into law on March 22, a day after it was passed in the House without a single Republican vote.
Not only does this legislation change health care policy, it also revamps the national student loan program. In a recent report for the Bill & Melinda Gates Foundation, 71 percent of college dropouts cited financial concerns as the reasons for discontinuing their educations.
Obama called the student loan reform “one of the most significant investments in higher education since the G.I. Bill” of 1944. According to U.S. Secretary of Education Arne Duncan, the bill cuts funding to private student lenders and redirects billions of dollars to needy students. Private lenders such as banks and Sallie Mae no longer will be the middlemen between money and students.
Though major student loan lender Sallie Mae was not available for comment on the new law, Duncan says it is a new era for students. “Now we can look any child in the country in the eye and say, 'It doesn’t matter how tough things are for you or your family or how tough things are at home, if you work hard and do the right thing, you are going to have a chance to go to college.'”
The legislation gives about $13.5 billion to help fill the shortage in federal Pell grants, which are given to the nation's lowest-income students to pay for college. It also will forgive students loans after 10 years if the borrower goes into a public sector job or joins organizations such as the Peace Corps or Doctors without Borders.
Indiana will see a 93 percent increase in Pell grants, Duncan says. “And in terms of additional students, an additional 56,000 students in Indiana would have access to Pell grants when they didn’t have access before. Think what that would mean for Indiana’s economy for the long haul. The most important thing we can do is have a much better-educated work force.”
IUPUI’s Director of Student Financial Services, Kathy Purvis, says students need to be better informed about the resources available to them. She says many scholarships and other funds go untapped.
“A few years ago we did get increases from the Department of Education on the higher loan limits and so that does help.So it would be nice to see additional loan limits, but I’d also love to see additional increases in grant money, and of course we always want more.”
Students looking for college funds have reasons to cheer. According to Duncan, more money is heading their way.
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