On Thursday, Congress pushed back hard against special interests by passing legislation that will reform the student loan system and cut out billions of taxpayer dollars handed out as subsidies to the bankers and middlemen who handle federal student loans. This overhaul of the student loan program will force commercial banks out of the federal student loan market and bring an end to the existing structure of the 35-year-old bank-based loan program.
“This reform of the federal student loan programs will save taxpayers $68 billion over the next decade,” President Obama. “And with this legislation, we’re putting that money to use achieving a goal I set for America: by the end of this decade, we will once again have the highest proportion of college graduates in the world.”
Obama said too that, to make college more affordable for millions of middle-class Americans, funding was being doubled under the federal Pell Grants for students, putting it on a stronger financial footing for those who depended on the program.
Beginning in 2014, the legislation also provides for caps on student loan repayments at 10 percent of income, making it more affordable for graduates to afford their student loan payment.
Obama said that programs at community colleges across the country were being revitalized to allow for an additional 5 million Americans to earn degrees and certificates over the next decade.
“These schools are centers of learning; where students young and old can get the skills and technical training they need for the jobs of today and tomorrow,” Obama said. “They’re centers of opportunity; where we can forge partnerships between students and businesses so that every community can gain the workforce it needs. And they are vital to our economic future.”
The legislation also increases support for minority institutions, including Historically Black Colleges and Universities, to keep them as strong as ever in the next century, Obama said.
