Sophomore Phillip Ensler, a Hatchet columnist, discusses the benefits of the Health Care and Education Affordability Reconciliation Act, and what it does for student loans.
Last month a frenzy around the nation’s capital – and throughout the country, for that matter – centered on the House of Representatives’ passage of a health care reform bill. But a major component of that bill has not been given sufficient attention. When Congress passed the Health Care and Education Affordability Reconciliation Act last month, it not only reformed our health care system, but also changed the student loans process to give students greater financial assistance and better terms on their loans. The change in policy is a victory for students, their families and higher education and should be applauded as such.
The legislation ends the practice of the federal government showering private student lenders with billions of dollars in subsidies, and instead makes the government a direct lender of loans. This allows students to take out loans directly from the government instead of private lenders. The change in lending practices will result in the government saving $61 billion over the next 10 years, according to the Congressional Budget Office. Many of the savings will then be redirected into larger Pell Grants, which help students cover some of their tuition costs.