By: Amanda Anderson
College graduates everywhere can finally breathe a sigh of heavy relief. President Obama made many promises during his successful presidential campaign, with one of the most popular being ending the frivolous practices of the major student loan companies. While the country may be practically split regarding the best route to health care reform, most Americans can agree that something finally has to be done about the abusive practices of the student loan industry. The 44th President plans to change the way these destructive companies have been conducting business and finally put an end to their shady practices.
President Obama signed the Student Loan bill on Tuesday, and he is already receiving harsh criticism from major loan corporations such as the infamous (and incredibly evil) Sallie Mae. While some members of the Republican Party have pointed out flaws in the bill, the bill does seem to offer those who must subject themselves to student loans a way to survive the debt.
What does the student loan bill mean to those pursuing higher education? Well it means quite a lot actually; there are some highlights of the controversial initiative that may actually help make college loan repayment more achievable. Bigger grants will be available to those who make lower incomes. Lower income students (or those that meet other eligibility requirements) and those who take out loans after July 1, 2014, will be able to cap their repayments to 10 percent of their income above the basic living requirements.
There will also be a more relaxed repayment system for the struggling college graduates who no longer wish to give away so much of their income to the big loan corporations.
Pell Grants will now increase with inflation, and the maximum grant should reach $5,975 from $5,550 by 2017. By the year 2020, the initiative will provide 820,000 more grants.
Community colleges will receive $2 billion over the next four years in order to provide career training programs to those who are able to receive Trade Adjustment aid.
And HBCUs and other institutions that educate mainly minority student bodies will receive $2.5 billion in additional funding in the next ten years.
It should come as no surprise that Sallie Mae has spent nearly $3 million to stop Obama’s bill. While speaking to a crowd at a community college in Washington’s Virginia suburbs, Obama said the following:
“For almost two decades, we’ve been trying to fix a sweetheart deal in federal
law that essentially gave billions of dollars to banks. The money was spent
padding student lenders’ pockets.”
However, the bill, like many before it, is not without its flaws. Jobs will be lost as a result of its passing. And for employees of Sallie Mae, that’s 8,500 jobs to be exact.
And unfortunately, the new bill won’t lower the outrageously high costs of higher education. Obama says it is up to the schools to do their part in making education affordable.
While the student loan bill is a great big step in the right direction of reforming the educational system in this country, those that have already been burned by the system won’t get too many benefits. At least the younger generation will have a fighting chance in overcoming student loan debt. And that is something that every American ought to be happy about.