Healthcare Bill Makes College More Affordable
Until this week, when President Barack Obama for a second time signed into law a healthcare reform bill, little notice had been given to a significant education reform tucked into the bill that will expand Pell Grant funding and help make loan repayment more manageable.
In addition to overhauling heathcare in the U.S., the Health Care and Education Reconciliation Act will also invest $2.255 billion in HBCUs and other predominately black and minority-serving institutions.
“The success of these institutions is not only vital to the success of African Americans, but it is also vital to the success of all Americans,” said John Wilson, executive director of the White House Initiative on Historically Black Colleges and Universities. He added that the administration wants to ensure that these institutions can contribute to Obama’s goal that the United States lead the world in producing college graduates by 2020.
Each year, more than 8 million people use Pell Grants to help pay for college. The bill invests more than $40 billion in the program to ensure that all eligible students will receive an award and that the amount awarded keeps pace with both inflation and the rising cost of college. It is estimated that by the 2020-2021 academic year, more than 820,000 additional grants will be awarded. Of that number approximately 200,000 will go to African Americans.
The bill also ensures that borrowers can afford their student loan payments by expanding the existing income-based student loan repayment program. New borrowers who assume loans after July 1, 2014, will be able to cap their student loan repayments at 10 percent of their discretionary income and, if they keep up with their payments, will have the balance forgiven after 20 years.
“All of these reforms are paid for with savings that were gained by reforming our nation’s student lending program,” said Melody Barnes, director of the White House Domestic Policy Council. “By removing the banks as middlemen and eliminating millions of dollars in annual subsidies, we’re ale to ensure that students have a more competitive and robust program for entering colleges, completing them and going onto jobs not burdened so heavily by additional loans.”