What’s Happening To Obama’s Student Loan Plans?

By Jessica

I’ll start this post with the disclaimer that I’m not one that usually gets involved in (or understands) politics. But what I do understand is the massive amount of debt I am incurring by spending four years at a university. And I’m sure that is something many of you also understand all too well.

That’s why many of us fell head over heels for Obama in the 2008 election. Among other things, he promised to overhaul the current student loan situation and create something that would offer more money for college students and make it easier for us to pay it all back.

But as it stands now, it looks like this major change may never happen. And it has a little something to do with another one of Obama’s campaign promises and personal goal: the health care bill.

How are these two linked?
What do they have to do with one another?

Well it seems that both of these bills are having a little trouble making it past congress. In order to push them both along, the Democrats have decided to lump them together in a process called “budget reconciliation” so a single vote will either “yay” or “nay” them both.

Seems good in theory, except that the bill deemed less important will have to be compromised in order to get everyone on board. And that one just so happens to be the overhaul on student loans.

Obama’s original plan was to greatly expand funding for direct, federal student loans, which would allow for more money for Pell grants (which aid low-income students) and stop banks from making large profits on student loans. (Basically, we’d get loans from the government instead of, say, Sallie Mae.) And that was a great idea, allowing even more students the chance at a college education…. and the chance to pay for it without going totally broke.

So what happened to it?

Well, linking this overhaul to the health care bill may help Obama’s long-awaited health care reform become a reality (which we can’t argue with!), but it’s implications for students, according to this article, are not good. It’s possible that loans available to students currently receiving aid would go down and there would be even less money available for future students. In addition, there would be a serious lack of funding for community colleges, which have become much more popular given the economic downturn.

With the cost of tuition skyrocketing as most people’s income decreases, is this something we can really afford? But at the same time, is this more important than health care reform?

What do you guys think? Which issue should be given priority? Do you think these two bills should be tied together?