Highlights of Student Loan, Financial Aid & Health Reform

Update October 26, 2011 President Obama is pushing for two further changes to help students by enhancing the student loan programs he was able to get enacted in 2009. The changes are:

  • Effective this January, if you’re someone who has different kinds of loans – guaranteed and direct – you’ll be able to roll them both into one direct loan and bring down your interest rate. You’ll only have to write one check a month, and you’ll see a discount. This switch adds no cost to taxpayers across the board.
  • You might remember that, as part of last year’s student loan reform, borrowers’ loan payments could be no higher than 10 percent of their disposable income. This is a big deal – but it wasn’t going to help anyone enrolling before 2014. Today, the President announced that he’s speeding up this program so it will affect students next year – helping over 1 million students. This will have huge consequences for people struggling to make their student loan payments.

Original post on 30 July 2010
A couple of months ago Ms. Estina Baker, president of the Bergen County NAACP, joined the Kokokidz at a meeting to explain some of the newly enacted laws of benefit to students. The new laws will both protect students’ access to healthcare and also help them protect their credit scores. Protecting your credit is important because over 50% of bankruptcies are due to medical bills. And, your credit profile may determine if you qualify to get a job, rent an apartment and even what you pay for car insurance.

Here’s a White House flier listing the immediate benefits of student aid reforms.

Benefits include

  • Pell Grant awards increase to $5500, effectively 2010-11
  • Interest on student loans down to 4.5% for 2010-11 and to 3.4% for 2011-12
  • Caps on student loan payments at 15% of discretionary income (10% after 2014) and after 25 years balances are forgiven
  • Student loans will now be made directly by the government, saving taxpayers an estimated, “$61 Billion over the next 10 years”
  • Students can remain on parents’ health insurance policy through age 25 and
  • Effective immediately, insurance companies cannot discriminate against individuals under age 19 whom have pre-existing conditions

What has been the case with students loans made by banks, is that students are hit with sky high student loan payments that kick in immediately after college ends. Before they’ve had a real chance to scout out the great job opportunities that match with their education and interests, many students been forced to take any kind of job in order to avoid defaulting on their student loan payments. The restructuring of the student loan system means a much brighter, and productive future for students who need this help to finance their educations.

Interested in other aspects of the health care and student aid reform? There’s a mountain of good information available at the Committee for Education and Labor’s website.

If you like these reforms, and what they’ll do for your family, remember to cast your votes in November to elect the Democratic Congressmen and federal Senators who will help President Obama continue to pass legislation that benefits the majority of Americans, which is help we so urgently need. You can vote at the polls or by absentee ballot.

July 30, 2010

@ 7:51 am | Permalink | Topic All,Student info

One Response to Highlights of Student Loan, Financial Aid & Health Reform

  1. Pingback: Immediate benefits of health care reform « kimi wei blog

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