Student loan bill puts private lenders out of student loan loop

<p style="text-align: justify;">THURSDAY SAW the senate vote on the Student Loan bill, a move that will change the way student college loans are made in the United States, banning private lenders from giving these loans and allowing students to get college loans directly from the Department of Education.</p> <p style="text-align: justify;"><br />The Student Loan bill debate, which was long overshadowed by the healthcare reform bill debate, has still been as fierce as the latter, <img style="border: 3px solid black; margin: 3px 4px; float: right;" src="https://images.shiksha.com/mediadata/images/1270469945php4biqNl.jpeg " alt="" width="150" height="110">with private lenders lobbying against it, as it will cut them out of the student loan business entirely. The Student Loan bill puts lenders like Nelnet and Sallie Mae out of the risk free lending operation, which was subsidised earlier by the government, to the extent that the risk went entirely to the government.</p> <p style="text-align: justify;"><br />The Student Loan bill cuts the money made by the private lenders in an operation, which earlier saw them as middlemen. Though they had given student loans for decades, these were subsidized by the Federal Family Education Loan program, with the government paying for up to 97 per cent of defaulted loans.</p> <p style="text-align: justify;"><br />From July 1, students will go for student loans to the Direct Loan program, with the Student Loan bill chalking up savings of $61 billion over a decade; money which is set to shore up and increase the Pell Grant program by $36 billion, apart from raising investments in community colleges.</p> <p style="text-align: justify;"><br />The victory of the Student Loan bill did not come easy and many proposals had to be scaled down. While the early version had also thought of investing an additional $20 billion in financial aid, it is now at $13.5 billion, while the increase in the Pell Grant program to $7000 yearly by 2020 has been capped at $6000 yearly.</p> <p style="text-align: justify;"><strong>Source: <a href="http://www.merinews.com" target="_blank">http://www.merinews.com</a></strong></p> <p><strong>Date: 5th April, 2010</strong></p> <hr /> <p><span style="text-decoration: underline;"><strong>For further details about related courses and colleges please click below:</strong></span></p> <p><a href="https://www.shiksha.com" target="_blank">Related courses and colleges</a></p> <p>&nbsp;</p>