Sec. 2201. Termination of Federal Family Education Loan Appropriations.
A victory today for anyone who likes to encounter wasteful government spending converted to useful government spending. Many moons ago (i.due east. concluding September) the House passed a very important bill that makes big changes to the federal student loan system. I posted the details of that bill in this post. But, like many of the bills churned out past the hugely productive Firm this session, it looked like that nib would keep to die a tranquility death in the Senate.
Until the minority party threatened to object to conferees to a briefing committee to hammer out the differences betwixt the Firm and Senate health care bills. This prompted the bulk party to write a terminal, merged health intendance beak outside of the briefing committee process. In the meantime, the Senate ballot in Massachusetts reduced the Democratic majority in the Senate to 59, which made passage of a final merged bill through that body impossible. Which brings us to the idea of introducing a relatively small-scale parcel of fixes to the Senate'southward wellness care neb that would appease the Firm and pass through the Senate through the budget reconciliation procedure, which allows bills full of provisions that straight impact the upkeep to avert th filibuster.
Why is this health care stuff relevant? Because the Democrats in the House decided to stick the master provisions of the student loan nib into that health care reconciliation pecker. That bill passed this evening and will become to the president for his signature. Non simply does this bring the health intendance reform saga to a close, it allows a bill that seemed likely to die in the Senate to become police. Funny to sentinel the series of unlikely events that converged to make this educatee loan pecker law.
Then at present we get stories like this: Congress Approves Obama'southward Overhaul of Educatee Loans:
WASHINGTON, March 25 (Reuters) - An overhaul of the college educatee loan program, ending federal subsidies to private lenders, won last congressional approval on Thursday, giving President Barack Obama a 2d major legislative victory this calendar week.
Coming in the wake of passage on Dominicus of Obama's landmark U.S. healthcare reform, the measure would end the 45-year-old Federal Family unit Education Loan Program, which has supported private pupil lending with federal subsidies.
The program will be replaced by an expansion of direct federal lending to students, eliminating well-paid middlemen -- bankers and other private lenders who have also been shielded by taxpayers from the risk of default.
The projected $61 billion in savings over 10 years would be used to provide federal grants to needy students and aid fund other federal education programs, such as support for community colleges and historically black schools. . .
Yous can discover a summary of the instruction-related content of the reconciliation nib here. Since I'thou pretty sure we have some college-age browsers (or at to the lowest degree parents of college-historic period browsers) hither, I'll mail service the relevant role of the summary in its entirety:
Title Two – Health, Education, Labor, and Pensions
Subtitle A – Teaching
Section 2001. Short Championship; References. Provides that this subtitle may be cited as the "SAFRA Act," and that, except as otherwise provided, whenever an amendment to, or repeal of, a section or other provision, the reference shall be considered to be fabricated to a section or other provision of the Higher Education Act of 1965.
Part I—Investing in Students and Families
Department 2101. Federal Pell Grants. Amends the Higher Education Act to include mandatory funding for the Pell Grant. This provides additional mandatory funding to augment funds appropriated to increase the federal maximum Pell Grant award past the alter in the Consumer Price Index. The mandatory component of the funding is determined past inflating the previous year's full and subtracting the maximum award provided for in the appropriations act for the previous yr or $4860, whichever is greater. Starting time in the 2018-2019 academic twelvemonth, the maximum Pell award will exist at the 2017-2018 level.
Section 2102. Student Financial Assistance. This section provides $13.5 billion in mandatory appropriations to the Federal Pell Grant program.
Department 2103. College Access Challenge Grant Plan. This section amends department 786 of the Higher Pedagogy Act by authorizing and appropriating $150 million for fiscal years 2010 through 2014 for the Higher Access Challenge Grant program created nether the Higher Cost Reduction and Access Act of 2007. Provides that the allocation for each State under this section for a financial year shall non be an corporeality that is less than 1.0 percent of the total corporeality appropriated for a fiscal year.
Section 2104. Investment in Historically Black Colleges and Universities and Minority Serving Institutions. This department amends department 371(
of the College Education Act by extending funding for programs under this section created under the College Cost Reduction and Access Act of 2007 for programs at Historically Black Colleges and Universities and minority-serving institutions through 2019, including programs that help low-income students attain degrees in the fields of scientific discipline, applied science, engineering science or mathematics by the following annual amounts: $100 1000000 to Hispanic Serving Institutions, $85 1000000 to Historically Black Colleges and Universities, $15 meg to Predominantly Black Institutions, $30 million to Tribal Colleges and Universities, $15 million to Alaska, Hawaiian Native Institutions, $5 meg to Asian American and Pacific Islander Institutions, and $5 1000000 to Native American not-tribal serving institutions.
Office Ii—Student Loan Reform
Department 2201. Termination of Federal Family Education Loan Appropriations. This department terminates the authorization to make or insure any additional loans in the Federal Family unit Education Loan program after June 30, 2010.
Section 2202. Termination of Federal loan Insurance Plan. This department is a befitting amendment with regard to the termination of the FFEL programme, limiting Federal insurance to those loans in the Federal Family Education Loan program for loans kickoff disbursed prior to July 1, 2010.
Section 2203. Termination of Applicable Interest Rates. This section makes a conforming amendment with regard to the termination of the FFEL program limiting interest charge per unit applicability to Stafford, Consolidation, and PLUS loans to those loans fabricated before July 1, 2010.
Section 2204. Termination of Federal payments to Reduce Student Interest Costs. This section makes a conforming amendment with regard to the termination of the FFEL program by limiting subsidy payments to lenders for those loans for which the first disbursement is made before July ane, 2010.
Section 2205. Termination of FFEL PLUS Loans. This section makes a conforming change with regard to the termination of the FFEL programme for federal PLUS loans by prohibiting further FFEL origination of loans afterwards July 1, 2010.
Section 2206. Federal Consolidation Loans. This section makes conforming changes with regard to the termination of the FFEL program for federal consolidation loans. This section as well provides that, for a 1 year period, borrowers who have loans nether both the Direct Lending program and the FFEL program, or who take loans under either program as well as loans that take been sold to the Secretarial assistant, may consolidate such loans under the Direct Lending program regardless of whether such borrowers have entered repayment on such loans.
Section 2207. Termination of Unsubsidized Stafford loans for Middle-Income Borrowers. This section makes befitting changes with regard to the termination of the FFEL program for Unsubsidized Stafford loans past prohibiting further FFEL origination of loans afterward July i, 2010.
Section 2208. Termination of Special Allowances. This section makes conforming changes with regard to the termination of the FFEL program by limiting special assart payments to lenders under the FFEL program to loans get-go disbursed before July 1, 2010.
Section 2209. Origination of Direct Loans at Institutions Outside the Usa. This section provides for the origination of federal Direct Loans at institutions located exterior of the United states, through a financial institution designated past the Secretary.
Section 2210. Conforming amendments. This department makes conforming technical changes with regard to the termination of the FFEL programme for Department of Didactics agreements with Direct Lending institutions.
Section 2211. Terms and Conditions of Loans. This section makes befitting technical changes with regard to the termination of the FFEL program to clarify the terms and conditions of Straight Loans.
Section 2212. Contracts. This section directs the Secretarial assistant to honor contracts for servicing federal Direct Loans to eligible non-profit servicers. In add-on, this section provides that for the outset 100,000 borrower loan accounts, the Secretary shall institute a separate pricing tier. Specifies that the Secretary is to allocate the loan accounts of 100,000 borrowers to each eligible non-turn a profit servicer. The section also permits the Secretary to reallocate, increase, reduce or terminate an eligible non-profit servicer's allocation based on the performance of such servicer. In improver, this section appropriates mandatory funds to the Secretary to be obligated for administrative costs of servicing contracts with eligible not-profit servicers. This section also requires the Secretary to provide technical help to institutions of higher education participating or seeking to participate in the Direct Lending program. This department appropriates $50 one thousand thousand for fiscal year 2010 to pay for this technical aid. Additionally, this section authorizes the Secretary to provide payments to loan servicers for retaining jobs at location in the U.s. where such servicers were operating on January i, 2010. This section appropriates $25,000,000 for each of fiscal years 2010 and 2011 for such purpose.
Section 2213. Agreements with State-Owned Banks. This section amends Part D of Championship Iv to directly the Secretarial assistant to enter into an agreement with an eligible lender for the purpose of providing Federal loan insurance on educatee loans fabricated past state-owned banks.
Section 2214. Income-Based Repayment. The section amends the Income-Based Repayment programme to cap student loan payments for new borrowers after July one, 2014 to 10% of adjusted income, from 15% percent, and to forgive remaining balances after xx years of repayment, from 25 years.
Disclaimer: My undergrad students loans were through the Federal Family Didactics Loan Program and I wish they had been Direct Loans.
Edited by Startraveler
Source: https://www.unexplained-mysteries.com/forum/topic/178612-the-student-loan-bill-will-be-law/
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