The President Signs Health Care Bill into Law, Overhauls Education

On March 30, 2010, President Obama signed into law the Health Care and Education Affordability Reconciliation Act (H.R. 4872). NASW strongly supported this bill and has tirelessly advocated for the creation of public policies that make health care and higher education more affordable and accessible for all Americans. The higher education provisions are expected to generate significant savings by redirecting lender subsidies to boost Pell Grant scholarships, expand the Income Based Repayment Program, increase the number of students who enter and complete college, including community colleges, and invest over $2 billion to Historically Black Colleges and Universities and minority serving institutions to provide students with the support they need to stay in school. The bill passed the House and Senate on March 25 with a Democratic vote of 220-207 and 56 to 43, respectively.

Colleges and universities switched from private lenders to the U.S. Department of Education by July 1, 2010. The lending overhaul, which would eliminate a program that subsidizes banks and other providers of federally backed loans, is projected to save the federal government $61 billion over 10 years with more than half of the savings channeled to Pell grants for low income students. More than 8 million low income students rely on these grants to fund their education.

Income Based Repayment Expansion

The law expands the current Income Based Repayment Program for borrowers who take out their first loan after 2014. These borrowers will not have to spend more than 10% of their discretionary income on student loans. Borrowers in good standing who make 20 years of payments will have any remaining debt forgiven. Current law caps IBR at 15% of discretionary income and forgives remaining debt after 25 years. You can go to the Department of Education’s website for more information http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp but do contact your lender to find out if you qualify.

[Top of page]