Student leaders have divided views about the student loan reform recently pushed through Congress using the health care bill. The reform calls for a $36 billion improve within the Federal Pell Grant, a need-based scholarship. The money is going to be offset as the federal government stops subsidizing student loans from private financial institutions.
Cameron Secord, Student Government vice president, mentioned though he thinks the bill is headed in the right direction, there needs to be a lot more particular definition from the need-based student.
“With the way the economy is going, there are most likely more students that need that expanded definition,” he said.
Bobby Andres, president of the Young Democrats, said he thinks the reform is really a “big win for students.”
“They’re taking all of the lending away from financial institutions, but the vast majority of it makes applying for loans easier,” he mentioned.
Andres said that prior to, you can get loans in the federal government or banks, but there were differences in the amount of money given.
“Typically banks would provide you with more cash, but with higher interest rates,” he mentioned.
Aside in the reform, Andres said he thinks the Federal Application for Student Aid ought to be revised.
“I believe, personally, FAFSA needs to become reworked,” he said. “Simply make the procedure a lot more transparent and simpler to entry.”
He mentioned there are a number of programs which aren’t used simply because individuals do not know about them.
“Student financing, banking and loans aren’t something students are familiar with off hand,” he said.
Kristin Moreaux, chairman from the University Republicans, said she does not like the reform and expressed her concern about possible tax burdens placed on students.
She known as the reform unconstitutional, saying it takes away students’ rights to select where they get their loans.
Moreaux said she thinks the Obama administration has reached a “new low.”
“I don’t like it,” she mentioned. “I believe this type of slipped in behind people’s backs.”
But Andres mentioned the feasible taxes are small.
“Basically to get a student, it is a fair quantity of cash to become taken out in spending,” he mentioned. “That’s a small quantity to become taxed.”
Moreaux said the very best remedy is to reverse the reform altogether.
“The entire premise of taxing the rich goes against the objective,” she said.
Moreaux also said the Pell Grant, which is given to students based on their parents’ income, should be regarded for students whose parents have a larger income.
“If your parent is within the Pell Grant earnings variety, then that’s fine,” she said. “But if your parents aren’t within the Pell Grant variety, and they’re still not paying for university, the only way to obtain government funding that isn’t loan-based is to obtain emancipated from your parents.”
Tim Kaine, chairman of the Democratic National Committee, mentioned in a phone call media briefing with university newspapers last week that not all hope is lost for those students ineligible to obtain the grant.
“There are other elements of the bill which will assist,” he said. “The core of the investment is for students that are Pell eligible and to expand the size from the grant to basically afford college,” he mentioned.
In addition towards the increase within the Pell Grant, the reform includes a provision for $750 million in federal aid that would increase entry to university and encourage higher university graduation prices.