I am very much intrigued and supportive of the proposed changes to the way student loans are issued nationwide. This is a topic that is very dear to me because of the substantial sum of student loans I am currently carrying and will need to take out in future years in order to continue my education.

Under the current system, many students whose parents aren’t able to pay for their tuition and room expenses, loans must be taken out. But the Federally guaranteed Stafford Loans don’t even begin to cover the cost of attendance at most public schools. Private loans must be sought and at a much higher interest rate of up to 15% or more.

The new program will eliminate private lending and make Stafford-like loans sufficient to cover the cost of attendance. The savings provided by the change will amount to over $85 Billion through the first 10 years.

“Among other things, the savings will be used to significantly boost Pell Grant scholarships (need-based grants given to low-income students), to keep interest rates low on need-based federal student loans for years to come, to simplify the FAFSA (Free Application for Federal Student Aid) form, to invest in strengthening community colleges,” Rachel Racusen, the deputy communications director of the House Education and Labor Committee, said in an e-mail.

Traditional education lenders are opposed to the plan because it will immediately eliminate them from a very lucrative market. Since the new bankruptcy laws of 2005 went into effect, all student loans including those issed by private lenders are protected from discharge and must be repaid, virtually eliminating loan loss to the corporations that fund them.

I am looking forward to the passing of this new legislation and the savings it will bring myself and millions of fellow college students around the country.

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