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Overhaul of Federal Student Loan Program

March 27, 2010

With all of America waiting to see what the outcome of the health care debate was going to be, it was easy for everyone to overlook the changes made to the federal student loan program.  When large bills are passed, it is common that other pieces of legislation are attached. In this case, the government has changed the way student loans will be given to students. 

In the past, the government has subsidized lending through companies like Sallie May.  Now, the government will be lending directly to the student.  By cutting out the middleman, proponents of the bill believe it will save the government billions and prevent private companies from squeezing students on interest rates.  The money saved will be put into a Pell Grant program.

 

Pennsylvania’s senator, Bob Casey Jr. praised the changes in a statement given to the press,

“It’s an unprecedented commitment to Pell Grants and higher education”
 Opponents of the bill, decried that the changes made are job killers and an unnecessary intrusion by the government.

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