The Future of Education

On March 30^th, nine days after the bill had passed, the Student Aid and Fiscal Responsibility Act was signed into law as part of the Health Care and Reconciliation Act, after a total of 56 votes compared to 43 approved the new legislation. According to Mark Kantrowitz of FinAid.org, over the next ten years the legislation is said to provide increased Pell Grants to students, which will now be provided by the United States government.

Over the next ten years, the student loan legislation will add $36 Billion dollars to the annual Pell Grant scholarship. Beginning in July of this year, the Pell Grant will be increased to $5,550 dollars and by the year 2017, will have gone up to $5,975 dollars; it will also provide 820,000 additional grants by 2020.

Essentially, the government will now be the direct lender of all federal student loans issued starting July 2010. According to the Congressional Budget office, the change will save taxpayers $61 Billion dollars over the course of the next decade and reduce the U.S deficit by a minimum of $10 Billion dollars. John Matulovich, an Access Group representative, believes that loans through the U.S Department of Education is a good change: “because they will offer certain loan forgiveness programs that other lenders do not as well.” Yet what exactly is to be said regarding the effect on both new students, and students currently enrolled in a higher education institution who already have been issued loans?

According to a statement made by the White House: for the students who have assumed loans after July 1^st, 2010, will now be able to “cap their student loan repayments at 10 percent of their discretionary income,” meaning the amount of income available remaining after the basic essentials have been purchased: food, clothing, shelter, and utilities. The statement goes on to say, that students who are persistent in their payments will have the remaining balanced forgiven after twenty years. Bill Mack, a financial expert, says that for the students who have acquired loans prior to July 1^st, “will now borrow under the same terms, from Direct Lending.” Furthermore, these students, once graduated, will now be able to consolidate their loans into one single program. According to Marc Kantrowitz, most benefits will entertain future students. “The main benefit, Kantrowitz says, “is [the government] mandating that all colleges be in a direct loan program.” This means that any student previously in the FFCF program in new or past loans, will also obtain lower interest rates. “But beyond that,” Kantrowitz continues, “it’s pretty much everything.” Bill Mack agrees that the impact the program will have on students will be minimal.

The legislation also is intended to distribute $2 Billion dollars towards a grant program for community colleges that will develop and improve their educational and career training programs. $2.25 Billion additional dollars will go towards Historically Black Colleges and Universities, including Minority-Serving Institutions. Furthermore, the government plans to pledge $750 Million dollars to fund programs intended on increasing financial understanding, and $1.5 Billion dollars towards federal loans.

Orrin Hatch, a spokeswoman for the Republican Senator Antonia—Ferrier of Utah, said that the bill was “completely inappropriate, [as Democrats] used takeover of the student loan bill to pay for the health care.” Many Republicans throughout the country agree with the Senator, disagreeing with government control over health care, therefore disapproving with the included educational reform. A spokesman from, Senator Olympia Snowe’s office in Maine, said, “The biggest reason for [Snowe’s] support for or against the student loan bill was more about health care…we opposed the student loan bill because it was put in with the health care bill.”

Democrats, however, with the exception of thirty-four votes against, felt very strongly about the bill. Jeanne Shaheen, Senator from New Hampshire voted for the student loan bill in the belief that it will help middle and lower class students who, while deserving of loans, were unable to afford them due to their initial and surrounding costs. Shaheen, formally a teacher, trusts that the bill will provide a guaranteed loan to suffering students as opposed to leaving it simply to chance.

Kathryn Solow, a sophomore at the School of Visual Arts in New York City and once a solid supporter of Obama, is now questioning the recently approved legislation. “While I might have several grievances regarding the health care bill, overall I am very happy that I will be guaranteed health insurance when I am older. Regardless, my main focus right now is on paying for college. I can only hope that whatever changes that are soon to occur will help ease my ongoing concern.”