New Education and Health Care Laws Benefit Students
Published Monday, April 5, 2010
We witnessed historical reform on two critically important issues this week: health care and education. But young Californians could be forgiven for thinking it had little to do with them: almost all the public discussion of health care reform focused on older people’s issues while student loan overhaul was barely discussed. They couldn’t be more wrong - in fact, there are few demographics which have more to gain from the new laws. This time, Congress and the Administration really did deliver on their commitment to young Americans.
On average, students borrow $23,000 in loans to pay for college. There’s good reason for it: a college degree increases a graduate’s lifetime earnings by over $1 million, and opens doors to all kinds of career opportunities. Most of the fastest growing sectors of the job market require some kind of post-secondary education. But while college costs have soared, financial aid has remained stagnant, leaving students to make up the difference with loans, and often to graduate with crushing debt.
The new student loan laws will increase funding for the Pell Grant program, which provides financial aid to millions of needy students. This funding will prevent 500,000 low- and middle-income students from losing their grants, and another 8 million from seeing their awards cut by 60 percent.
Students will also benefit from income-based loan repayment, under which college graduates with federal loans who have low incomes will never be required to send in a payment higher than 10 percent of their monthly salary and can see their loan completely forgiven after 20 years. Best of all - this historic investment in students won’t cost the American taxpayer a cent. It’s all covered by savings generated by eliminating wasteful subsidies paid by the federal government to banks like Sallie Mae, which package federal loans for students.
Health care is often presented as an older person’s issue, but in fact Americans aged 18-24 are the most likely demographic in the country to lack health insurance: of those between the ages of 18 and
