Health Care Bill Reforms Pell Grants
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Filed under Pell Grants
Built within a health-care reform bill that became the focus of Washington the last 14 months or so, was a reform for education programs and student loans. In essence, the health care bill reforms Pell grants as well. Part of the reconciliation bill that Congress passed Thursday, college students will now have access to larger programs, and those students taking out government loans will have a much easier time repaying them.
The changes represent a major change of the college assistance programs that the government has offered previously. Essentially, the government now will control federal student loans, and lieu of private institutions and banks.
One of the beneficiaries of the savings from the switch to the government taking over student loans is an increase in Pell grants. Many students in fact nearly 9,000,000 students attend college with the help of Pell grants. Many students and borrowers will see lower interest rates and higher approval rates on student loans as well.
While Pell grants will not increase dramatically, many are praising the bill. “The increases in the Pell Grant are better than nothing, but they are still quite anemic,” said analyst Mark Kantrowitz, publisher of the student assistance Web site FinAid.org.
Some of the key components of the reform are, Pell Grants would rise from $5,550 for the coming school year to $5,975 by 2017. Lawmakers had initially hoped to reach a $6,900 cap and More eligible students could get a full Pell Grant. Most grants go to students with family income below $20,000, but students with family income of up to $50,000 may also be eligible.
College graduates who have taken out student loans will have an easier time repaying loans. The government will basically insure that workers in low-paying jobs will be able to lower their payments. The current law caps monthly payments at 15 percent of these workers’ incomes; the new law will lower the cap to 10 percent.
Again, the increases somewhat modest, but it increases an increase in more students will have more money available through Pell grants to help offset tuition cost for attending college. Changes will become official once the legislation is signed by Pres. Obama, which is expected to take place quickly.
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