Education Reconciliation Act
The Act was enacted into law by means of the reconciliation process, meaning, in order to amend the Patient Protection and Affordable Care Act, the Education Act was included as part of the provisions submitted for the budget resolution text necessary to passing the law in the House and Senate. Click here for an informative Wiki on that process.
Locally, the Education Reconciliation Act brought both welcome and unwelcome news, as many in the area were affected by the closing of SallyMae, a large provider of the areas employment. Still, the Act does provide some benefits in the area of education, especially that in the form of student loan reform. The language is very similar to the Student Aid and Fiscal Responsibility Act that also passed the House last year, but with some slight variation. This reform package includes:
- Ends the process of the federal government giving subsidies to private banks to give out federally insured loans. Instead loans will be administered directly by the Department of Education.
- Increases the Pell Grant scholarship award.
- For new borrowers of loans starting in 2014, those who qualify will be able to cap the amount they must spend on loan repayment each month to 10% of their discretionary income (current cap is 15%.)
- Also, for new borrowers after 2014, loans will be eligible to be forgiven to those who make timely payments after 20 years (the current time-frame being 25 years).
- Will make it easier for parents to take out federal PLUS loans for students.
- Several billion will be used to fund historically poor and minority schools, as well as increasing community college funding.
Of course, the best way to know the act is to read the act, which can be downloaded for free here from The Library of Congress (There are 5 versions of Bill Number H.R.4872 for the 111th Congress. Usually, the last item is the most recent.)
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/25/AR2010032503578.html, The Washington Post. March 21, 2010.