[Wildcatk23]

The Health Care and Education Reconciliation Act signed today makes a number of key investments in higher education, while at the same time putting an end to a system that used taxpayer money to subsidize private bank loans to students. It reinvests those $68 billion in savings toward making college more affordable, as well as reducing the deficit.

Speaking at the Northern Virginia Community College this morning, President Obama explained how this helps students by ending subsidies for private lenders

“What’s gotten overlooked amid all the hoopla, all the drama of last week, is what happened in education -- when a great battle pitting the interests of the banks and financial institutions against the interests of students finally came to an end.

You see, for almost two decades, we’ve been trying to fix a sweetheart deal in federal law that essentially gave billions of dollars to banks to act as unnecessary middlemen in administering student loans. So those are billions of dollars that could have been spent helping more of our students attend and complete college; that could have been spent advancing the dreams of our children; that could have been spent easing the burden of tuition on middle-class families. Instead, that money was spent padding student lenders’ profits.

Now, it probably won’t surprise you to learn that the big banks and financial institutions hired a army of lobbyists to protect the status quo. In fact, Sallie Mae, America’s biggest student lender, spent more than $3 million on lobbying last year alone.

...By cutting out the middleman, we’ll save American taxpayers $68 billion in the coming years -- $68 billion. That’s real money -- real savings that we’ll reinvest to help improve the quality of higher education and make it more affordable.”


Being a college student with current loans taken out i was wondering if you guys could explain how this could help me or effect me later on?

[miragesmack]

Does this really help the student? I think the loans are at the same rates, it's just a different lending source. They just are taking the profit that the bank was making, and using it to fund the health care bill. I do wonder what happens if you default though. The IRS will confiscate your money, via a fine, from your tax returns if you are not complying with the new health care rules. Will they do the same if you default here? Plus, can you file bankruptcy on these loans should you need too, or will they just take them from your tax returns? I don't know the answers, but sounds like these are not positive possibilities to the borrower. I never had any issues with my loans, which I think were at 5.5% or so.

[vundy33]

I've been blessed to not have to pay for college...

I have a cousin that owes $50,000 on his student loans...I don't know what I would do if I had that kind of debt.