The Obama administration is proposing a very broad overhaul to federal college aid programs. If approved by Congress, the following changes will go into effect in July 2010.
Pell Grants The amount of the grant awarded to you depends on your financial circumstance. In 2010 the amounts granted will no longer depended on the budget for a particular year. Also, the maximum Pell grant would rise with inflation. If approved, the maximum Pell grant in 2010 would be $5,550, up from $4,731. More information about Pell grants is available on the Education Department’s Web site.
Lenders Currently, banks and other companies (like Sallie Mae) provide loans to students at interest rates set by Congress and guaranteed by the government. Under Obama's new proposal, instead of getting your student loan from banks you would borrow directly from the government. You would still be able to borrow from banks, but the loans would not be guaranteed and the interest rate would not be set by the government.
Loan Amounts As outlined above, Obama wants students to borrow from the government instead of banks. This would be accomplish by expanding the Perkins loan program and increasing the amount you can borrow to match what is available through the Stafford loan program, currently $31,000. The Obama administration also want to make these loans available at all colleges and universities. Additionally, the total amount of money available to loan would sharply raise from $1 billion a year to $6 billion a year.
Source:
NY TimesLabels: College, Finance, Obama
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