Hidden within the health care legislation passed by Congress Thursday was a big bonus for college students — more money.
The Health Care and Education Reconciliation Act of 2010 made changes to the first health care bill passed by the Senate and increased funding for Pell Grants and student loans.
The bill will boost Pell Grant awards from a current maximum of $5,550 to $5,975 by 2017.
Congress has also made it easier for students to qualify for Pell Grants.
Before the new bill, students with a family income of $45,000 were eligible for Pell Grants. Now, students with a family income of $50,000 can qualify.
The bill also makes changes to the student loan system. Currently, the government subsidizes banks to offer federal student loans and covers up to 97 percent of defaulted loans.
Ben Cavataro, Florida College Democrats president, said under the current system, the government carried all the risk, while all the profits went to the banks.
Under the new legislation, the government will no longer act as a middleman. Instead, the Department of Education will offer loans directly to students.
Cavataro said the new legislation will ensure student loans work for students and not for banks.
UF College Republicans Chairman Johnathan Lott said he supports ending subsidies, but is worried the federal government can’t operate as well as private banks.
No Republicans voted for the legislation, and Sen. Lamar Alexander, R-Tenn., a staunch defender of the old government-subsidized loans, wrote in a Washington Post op-ed, “The Obama administration is pushing for another Washington takeover — this time of the student loan system.”
But Democrats have said the new reforms will save the government money.
“This reform of the federal student loan programs will save taxpayers $68 billion over the next decade,” President Obama said. “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.”
The new legislation also caps annual student loan repayments at 10 percent of a borrower’s income.
