‘Student Loan Made Easy’

In a narrow vote US Congress has voted to have a government body handle low cost student loans and to put money into scholarships and grants. This vote basically cut out banks that provided loans to students and these loans were guaranteed only by Washington DC.

Secretary of Education Likes It!

The secretary of education said this is the beginning of a big victory for students. The new law will put most government guaranteed student loans under governmental control. This new Student Loan policy is scheduled to begin in summer and would give half a trillion in school loans in the next decade.

Banks Hate It!

Most college students that borrow money for school do so by loans backed by Washington. This year banks loaned over 50 billion dollars in government guaranteed school loans to students. The banking industry will no doubt be hurt by this move and its lobbyist are already preparing to strike back when Senate votes on the same set of laws in the coming months.

More Money For Students

The new law caused a big donnybrook between the Obama administration and the bankers because it will save the government over 60 billion dollars. This money comes right out of the pocket of the banking industry which will get subsidies from the government for student loans. The money government is saving is to go into backing Pell grants for students. Pell grants program was on ropes because of the high number of student returning to school. If the law passes poor college students will see in their Pell grants increased but if it does not they will see a cut in funding and over half a million will lose the grants all together.

Will Student See A Difference

Most student applying for loans will not see much of a change. Loans will still be handled by the same folks on campuses only the middlemen(banks) will be cut out of the process.

Lost Jobs

These banks should see the most change with the new law because they will have to shed the jobs of the people that handled these loans or integrate them into other departments. Some say thousand of jobs will be lost special at lenders like Sallie Mae.

More Help For Low-Income Students

All in all it should be a good thing for low income students with the continuation of the Pell grant program and a needed induction of cash to that program. Also anything that will save cash for Washington and add cash to education cannot be all that bad, could it?