President Barack Obama brought about a new loan bill in the United States of America, which enabled the prospects of making student loans more easier to obtain. Officially named as the Health Care and Education Reconciliation Act, this loan bill is actually an extension of the government’s Pell Grants, that aim to help students with their college education, without getting into severe debt crisis later on in their life.

Most of the students in US have to go through a loan process in order to afford for the high standard education and these changes have now had quite an affect on student loans by the year 2014.

There are quite a number of benefits that could prevail for adopting this new loan bill, such as :

a). No more need of a middleman :

Banks and private lending companies, would usually act as middlemen and would charge the students an enormous amount for their loan services, leaving the poor students with no other option than to agree for an after – graduation – debt filled life. Now with this new loan such middlemen processes will be eliminated and students will be dealt with directly by the government.

b). Increased Pell Grants:

Pell Grants will be increased and will be given to an increasing number of students. This means that these loans will help students with obtaining such interest free debts that they will not need to repay in future life. The only condition is that these grants may be able to meet up with the increasing cost of tuition fee.

c). Funds for minor institutes:

Institutes for minority student body will be given funds to improve the quality and services of the schools. An amount of $2.55 billion is planned for spending on the schools.

d). Lower income payment and debt forgiveness:

Under the new rule, there will be only 10% deducted from the student’s income when he will start earning after graduation. Thanks to this rule there will be a reduction of at least $100 for a single borrower. Besides that long term borrowers of 10 years or more  will be able to have their loan forgiven.

Eventually this loan bill is a new hope to thousands of students who are trying to pursue a degree in the prestigious American schools. Though it will be implemented from 2014, it will definitely be a new land mark for thousands of students.

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