The House of Representatives has sent a bill to the Senate that, if passed would end government subsidies for private lenders. This would in turn put the government directly in charge of the student lending. One positive net benefit woudl be an increase in Pell Grants which many of us on sharenotes.com are familiar with.
So what does this bill mean to the average student. Honestly, the changes will be visually mild and largely behind the scenes. Probably the 2 biggest factors that may directly effect you is the increase in Pell Grants as mentioned above, and a limit on a 2012 scheduled interest rate increase.
Opponents of the bill have expressed concerns over job losses that may be suffered in the private industry who have thrived on government subsidized lending. On the flip side, opponents of the bill have pointed out that no one is stopping private companies from writing educational loans, they simply will no longer be able to do so with tax payers money.
The program may yield an estimated savings of 47 Billion to 87 Billion in taxpayer dollars, should the bill pass. Yes I said Billion.
So what’s my take? Well I can’t say that I am an expert, however, more Pell Grants and interest limits are a good thing. More importantly, tax savings of that magnitude is also something to take very seriously. Some job loss in the industry is a unfortunate side effect, however it’s hard to feel too terrible for an industry that has reaped huge profits by lending out tax payer dollars.
The outlook for the Bill is not exactly clear as a it enters the Senate. While it has a great deal of support it’s by no means a certainty that it will pass. Many college students sometimes fail to see the benefits of being involved in our democracy, but I challenge all the students on sharenotes.com to be involved. Very often it’s our congressmen and women, our senators and of course our president who shape the programs that impact our life. Programs and bills that pass in these trying times may have a profound effect on the economy that many of us will be graduating into.
What do you think? Love the bill? Hate the bill? Leave your comments below and have your voice heard by your fellow students.
