What You Should Know About the Bill

This bill is very complex. Most of it refers to pre-existing laws and bills. Some of the best interpretations of the bill can be found on the Committee for Education and Labor website.

The education portion of the bill called “The Student Aid and Fiscal Responsibility Act” was passed as part of the Health Care and Reconciliation Act on March 21, 2010 and signed into law on March 30, 2010. 


- Over the next 10 years, $36 billion dollars will be added to increase the maximum annual Pell Grant scholarship. This year, starting in July, it will be increased to $5,550 and will go up to $5,975 by 2017.

- A grant program for community colleges will receive $2 billion to develop and improve educational or career training programs.

- $2.55 billion will go towards Historically Black Colleges and Universities, as well as Minority-Serving Institutions.

- $750 million will fund programs for states and institutions that focuson increasing financial understanding, as well as increase funding for the College Access Challenge Grant program.

- $1.5 billion will go towards federal loans, making it more affordable for borrowers to repay the money. Prior to this bill, monthly borrowers could cap their monthly federal student loan payments at 15% of their income. This act lowers the cap to 10% for new borrowers after 2014. Additionally, students who take out loans after July 1, 2014 and keep up with the repayment will have their debt forgiven after 20 years. Those who go into the public service field (teacher, nurses, and those enlisted in the military) will have any remaining debt forgiven after 10 years.

- Aside from the changes for students, there are also important changes for taxpayers and the American economy. All of Direct Loans must be serviced by private lenders, which must be serviced by workers in the United States. When loans were made by banks, they were allowed to use workers overseas, providing fewer jobs in the U.S.

- According to the Congressional Budget office, this act will save taxpayers $61 billion over the next 10 years and will reduce the deficit by a minimum of $10 billion over the same period of time.

These links are helpful in understanding what’s changing:

This is a release from the White House on the bill (official interpretation of the bill for the public) http://www.whitehouse.gov/sites/default/files/10326-higher-ed.pdf

This is a myth vs. fact sheet about the education portion of the bill (it’s seems to have a bit of an opinion, but it shows you where some of the argument about the bill has been) http://edlabor.house.gov/blog/2009/07/safra-myths-vs-facts.shtml