Within the health care reconciliation, significant changes were introduced into law concerning government student loan programs. Included in this laws is what seems to be at least a government takeover of government student loans, in addition to big increases in Pell Grants.
The new law removes the Government Family Education Loan System and slices out individual providers. Starting on July 1, all government loans will start through the government Direct Loan System. Based on the non-partisan Congressional Budget Office, cutting out banks and individual providers from the student loan industry will save taxpayers $61 billion across the subsequent 10 years, a minimum of $10 billion of that will slow up the government deficit and help underwrite the price of health change.
The new law additionally consists of $36 billion for Pell Grants, that offer financial aid to low-income and some middle-income students. The maximum amount of Pell Grants this season will increase to $5, 300 and to nearly $6, 000 in 2017. Without the new law, Pell Grants might have been restricted to $2, 150 following year. Students getting bigger Pell Grants will have to lend less to cover college.
Starting in 2014, debtors will also find better debt pay back conditions. Present debtors can restrict regular government student loan payments to 15% of their discretionary earnings. In 2014, this cap will be decreased to 10% of discretionary earnings.
The only function remaining for the non-public sector will be loan servicing, and the legal intention seems to be to ensure these types of agreements will be performance-based and granted to the loan servicing firms giving the top customer service.
It appears ironic that this last minute addition to the health care change laws certainly amounts to a government takeover. Although it's difficult to take critically the debate that the new health care law amounts to a takeover of health care, the new law certainly appears to put the government government straight in control of lending to the nation's students.
The new law removes the Government Family Education Loan System and slices out individual providers. Starting on July 1, all government loans will start through the government Direct Loan System. Based on the non-partisan Congressional Budget Office, cutting out banks and individual providers from the student loan industry will save taxpayers $61 billion across the subsequent 10 years, a minimum of $10 billion of that will slow up the government deficit and help underwrite the price of health change.
The new law additionally consists of $36 billion for Pell Grants, that offer financial aid to low-income and some middle-income students. The maximum amount of Pell Grants this season will increase to $5, 300 and to nearly $6, 000 in 2017. Without the new law, Pell Grants might have been restricted to $2, 150 following year. Students getting bigger Pell Grants will have to lend less to cover college.
Starting in 2014, debtors will also find better debt pay back conditions. Present debtors can restrict regular government student loan payments to 15% of their discretionary earnings. In 2014, this cap will be decreased to 10% of discretionary earnings.
The only function remaining for the non-public sector will be loan servicing, and the legal intention seems to be to ensure these types of agreements will be performance-based and granted to the loan servicing firms giving the top customer service.
It appears ironic that this last minute addition to the health care change laws certainly amounts to a government takeover. Although it's difficult to take critically the debate that the new health care law amounts to a takeover of health care, the new law certainly appears to put the government government straight in control of lending to the nation's students.
