Obama revamps student loan reform for college students across America
By Matias Carvajal
In his weekly address to the nation on March 14, President Obama unveiled his new plan to make college education more affordable for students across America. Four days prior to this address Obama stopped by Georgia Tech, where he introduced the bill.
“Earlier this week, I visited with students at Georgia Tech to talk about the importance of higher education in the new economy, and how we can make it more affordable…. It doesn’t involve any new spending or bureaucracy. It’s a simple declaration of values…what I call a Student Aid Bill of Rights.”
This new reform is the first time in five years that the Obama administration has dealt with the topic of student loans. In 2010, Obama signed the Health Care and Education Reconciliation Act, which essentially focused in cutting the banks out of the equation, who were acting as subsidized middlemen between the student and the government. With banks out of the picture, the act positioned the federal government as the direct lender and in the process save an estimated $90 million over a 10 year span, according to White House staff, causing more funds that could be used for aid such as Pell grants and general educational funds. The act also touched on interest rates, lowering them from 15 percent down to 10 percent depending on income, and expanded tax credits.
Five years later, the Student Aid Bill of Rights entails a simple addition to the Health Care and Education Reconciliation Act, mainly focused on bettering the communication between the student and the government at the time of applying for a federal loan.
“Every borrower has the right to an affordable repayment plan. And every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans,” said Schoolcraft student Fabian Vergara, who plans to transfer to Michigan State University in the fall. After his 2 years at Michigan State he will have an estimated $16,000 dollars in federal and private loans. “I hope that after I graduate, I can have a job that can pay the bills on top of my loans.”
Obama ended his address to the nation by asking citizens if they believe in this revamping of student aid, and to sign a declaration by logging on to WhiteHouse.gov/CollegeOpportunity.