Expansion Of College Financial Aid Resources Good News For Students
Last March, President Barack Obama made an appearance at Northern Virginia Community College. According to some of the media, the Chief Executive was there to publicly celebrate the passing of a major part of his health bill. Yet this portion didn’t revolve around the controversial battle for insurance reform. Actually, it had everything to do with how students will get large chunks of their financial aid, everything from scholarships to loans to grant for online school.
One thing that has been seriously under reported over about this new legislation is the bill’s title. It’s in truth called “The Health Care and Education Reconciliation Act”. Most mainstream media has egregiously omitted that education reform is also part of this act, and if it goes according to President Obama’s plans, it will have an effect on all forms of schools, including online ones.
It should be noted this new bill addressed the education system from the ground up, so major parts of it concern elementary and secondary education. At the same time, it’s hard to deny the nation’s education system is in need of a considerable reconstruction, from the ground up. Students who graduate high school but aren’t able to read aren’t going to make the best college students after all.
The key bit of legislation though revolves around online degree grant. Back in the day, when students applied for them, they got the money straight from the federal government. When the legislature that initially created student law systems was signed by then President Lyndon Johnson in 1965, students got their loans directly from the federal government, which also administered them.
After a time, though, it was felt costs could be saved if the money was administered through banks. Over time, the banks felt they could charge higher rates than was initially planned. As the interest rates escalated, so did the number of loans that began to default. This was then coupled with the present day recession, and the government began to really lose money.
One key aspect of the new Obama plan is it cuts out the banking middle men, again returning the student loan system completely back into the Board of Education’s hands. Obama expects that not only will there be less defaults because the interest rates will be lowered, but the profits generated from these loans will be plowed back into increasing the Pell Grant and related financial aid programs.
That isn’t all the President will do with the savings, either. He announced a portion of money saved will go to online and community colleges. This is because these schools simply cost as much as 60% less than the bigger universities. If the community college has an online division, that’s even better. All the school has to prove is it is an accredited Title IV institution.
“For a long time, our student loan system has worked for banks and financial institutions”, Obama said that day. “Today, we’re finally making our student loan system work for students and our families. But we’re also doing something more. From the moment I was sworn into office, I’ve spoken about the urgent need for us to lay a new foundation for our economy and for our future…we can rightly say the foundation on which America’s future will be built is stronger than it was one year ago.
As the rules for lending, scholarships and college grants and scholarships are changing, all avenues should be explored. Find out what is available with online college grants and see if corporate sponsorship, private grants, or other means are compatible with your needs. Don’t overlook grants and scholarships, a backbone of financial aid for those who qualify.
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