New Student Loan Law By Obama
Classified as: Student Loans
President Barack Obama has signed The Student Aid and Fiscal Responsibility Act on Tuesday. This act is about Pell Grant scholarship increase and also about loan issuance directly to borrowers. 
The Student Aid Act is a part of health care resolution. House of Representatives have passed the bill by a vote of 253/171 on September 19th and senate has approved the bill by 220/211 votes.
Previously subsidies were given to private loan lenders for providing financial aid to students. This distribution of financial aid was according to Federal Family Education program and is no more in use after the new act passing. But now according to new act all financial aid will directly go through the Direct Loan Program. This will save $87 billion in coming 10 year for the government after eliminating subsidies.
This act is much criticized by the private lending companies as they believe that the outcome of this act will be losses of many jobs. A group of opponent is much worried about job losses within the Federal Family Education Loan Program. But supporters of this act are of the view that it will save a lot of money through the Direct Loans Program.
Pell Grant Scholarship provides assistance to low-income families and this new act will increase its support. Pell Grant has supported nearly 77% cost of a four-year degree program since its start. These days Pell Grant only covers 33% of total cost.
Obama’s dream behind Pell Grant Scholarship expansion is to have the highest number of college graduates till 2020 in America. According to him this could be achieved after increase in Pell Grant scholarship so that more student can avail this opportunity to enter universities.
Obama said in his speech in September 2009 that if we cut out the middleman — the banks — and lent directly to students, the federal government would save that money and could use it for what’s actually important — helping students afford and succeed in college,”
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An investment in education is an investment in the future of the United States!
As a writer for GradGuard, I typically write about issues that are directly related to college students. The news of the student loan legislation was viewed as great news for me as a writer and a college student.
With the increasing costs of attending academic institutions, increasing the access to financial aid is great. By doing this, it is preventing 500,000 students from losing there Pell Grants and another 8 million from seeing there awards cut by 60%.