Student Loan Bill Brings Opportunity
The Student Aid and Fiscal Responsibility Act, which was included in the health care reconciliation bill that was enacted last month, directly impacts higher education financing programs guaranteed by the federal government. This legislation eliminates the Federal Family Education Program and replaces it with the Direct Loan Program effective July 1, 2010. It also increases the maximum Pell Grant, starting in 2013 to 2017, at the same rate as the consumer price index.
While this legislation does eliminate private lenders from participation in federally guaranteed loan programs, it does not impact the private student lending programs that many banks, and most recently credit unions, provide in an effort to bridge the funding gap that many families face once all of their federal aid and grants are exhausted.