April, 01, 2010

President Barack Obama, who wants to limit banks' investments and charge them fees to pay for future bailouts, took over student-loan programs in a bid to save $61 billion over 10 years.As part of the Healthcare and Education Reconciliation, the final legislative piece of health-care reform, the federal government will now directly dispense loans and grants through the Department of Education rather than give banks the subsidies to do so via the Federal Family Educational Loan Program (FFELP).

Invests more than $40 billion in Pell Grants, more than doubling the funding available a year ago. By the 2020-2021 academic school year, more than 820,000 additional Pell Grants will be made. There are currently nearly 8 million.Expands the existing income-based student-loan repayment program. New borrowers who assume loans after July 1, 2014, will be able to cap their student-loan repayments at 10% of their discretionary income and, if they keep up with their payments over time, will have the balance forgiven after 20 years.

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