In part of the new health care reconciliation by the federal government, there are a lot of changes that were implemented and affect student loans nationwide. Included in these changes is what appears as a federal takeover of federal student loans.
The new law removes the federal family education loan program which cuts out private lenders. Starting July 1st, all federal loans would come from the federal direct loan program. This is because according to the congressional budget office, removing private lenders from the student loans industry would save taxpayers $61 billion for the next ten years. $10 billion of which will help a lot in reducing the federal deficit and help improve the national health industry.
Te new law will also include $36 billion for Pell Grants that provides help and assistance to low income as well as middle income students. With these changes, Pell Grants can award maximum amounts of up to six thousand dollars by 2017. This is a great help to college students who are recipients of Pell Grants because they would only need to borrow a small amount of money in order to pay for their education.
With the new laws, borrowers would also be entitled to improved debt repayment terms starting on 2014. Borrowers would be able to limit their monthly federal student loan payments for up to fifteen percent of their total income. And with the new laws, the private student loan sectors would be limited to providing services and assistance. Also, any contracts that would require loan services would be contract and performance based. The service contract would be awarded to private loan institutions that are providing the best kind of customer service and customer care.
For most people, it is ironic that such a last minute addition to the health care reform would amount to a federal take over . There are even some people who find it difficult to take seriously the argument that the new health care laws as well as reforms will be amounted to a takeover of health care. There are also a lot of people on the other hand that find the effects of the new health bill reforms on the student loans particularly good and refreshing. A lot of people also feel that that the fact that the new laws had put the long term benefits of the nation’s students first and foremost, will be a great start on the long road of improving the nation’s health care and education.