Student Loan Reform Bill Helps Struggling Students
The past year has been one of the most economically challenging Americans have faced since the great depression. With banks, lending institutions, and insurance giants in danger of collapse and the auto industry taking a huge hit, unemployment is at a startlingly high rate. Most of this has been due to to reckless speculation and the overuse of derivatives by investors from around the world. Regardless of the root causes, those still employed have seen cuts in benefits, hours, and wages, thus making it more difficult for the average family just to get by. At the same time, the availability of loans and credit cards has decreased, forcing a society used to “charge now, pay later” to suddenly live within its’ diminishing means.
Among those who have suffered the most are those students who have worked hard for years to get accepted by the college of their choice, only to find the means to pay for education unavailable. Colleges and universities are raising tuition costs, while banks are refusing loans to parents and students on a regular basis. It’s clear that should such a trend continue, many middle-class Americans will no longer be able to afford to send their children to college, making it even more difficult for those students to find well-paying jobs in the future. It is a destructive cycle in desperate need of interruption, and fortunately, the President agrees.
In addition to recent health care reform measures, the Obama administration has been working on a plan to help more students get the financial aid they need by cutting out the brokers and the middlemen. Instead of financing through private companies like Sallie Mae, those needing student loans with no cosigner will go directly to the federal government. While this is bad news for private lending institutions, it is a silver lining of hope in a very dark cloud for students. Obama’s measures will lower interest rates, increase the maximum amount of funding available through Pell Grants, and offer student loan forgiveness after 20 years for those who pay on their loan each month. Considering the average undergraduate student loan debt is 40,000 dollars before a student ever sees his first paycheck or lives in his first apartment, this is a huge step in the right direction. While America still has a long way to go before the dream of affordable education for every child is realized, it is comforting to see us at least moving along the right path.
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