PSU news by
Penn State's student blog



Student-Loan Bill: What Does It Mean?

Tucked into Sunday’s health care vote was a bill passed by Congress this week, which endorsed President Obama’s plan to overhaul the federal student loan system. Now the legislation moves on to the Senate, where leaders think they have the votes to get it passed.

The Chronicle of Higher Education reports,

The House passed a version of the student-loan bill back in September, but Democrats did not have enough votes to get it approved in the Senate. The version approved Sunday, as part of a package with the health-care measure, represents a compromise that reduces the amount of money being dedicated to education programs.

The most major accomplishment of the bill will be the national switch from the Federal Family Education Loan to the Direct Loan program. Critics of FFEL claims it’s incredibly wasteful, and the bipartisan Congressional Budget Office has reported that the FFEL’s elimination will save $61 billion over the next 10 years. Instead of going to a bank for a loan, students will be able to apply for them through the college’s financial aid office, thus decreasing the fees paid to banks and lowering both interest and denial rates. Take a look at a helpful comparison of the old and new ways.

However, Penn State will not be affected by the switch to Direct Loans… the university made that move way back in 2008.

The majority of the money saved by the switch to Direct Loan administration will be redirected into Pell Grant funding.

As it turns out, the bill hasn’t lived up to expectations, according to Mark Knatrowitz, an expert interviewed by the New York Times. Originally, the maximum amount for Pell Grants was going to be raised from $5,550 to $6,900. However, the final version of the bill only increases the maximum to $5,900 over ten years. Kantrowitz claims that this won’t do enough to match the inflating cost of college. In any event, the maximum will not stay the same through 2013.

Another outcome is that the terms for repaying income-based student loans will change. The percentage of income on which payments are based will decrease, and the forgiveness period will be reduced from 25 years to 20 years. However, this policy won’t be enacted until July 1, 2014, so few current Penn State students will feel the benefits.

[Photo via the White House’s Flickr account]

About the Author

Noah Simmons

Noah is an International Politics major minoring in French. Noah participates in the Mock Trial team, the Sailing Team, and is the president/founder of the Odyssey of the Mind club. Besides pushing the limit of what is journalistically acceptable, Noah enjoys long walks on the beach and football. In a previous lifetime he was William Wallace


More by Noah

The Future of Footwear Comes to Penn State

A new fad has hit Penn State, one that threatens to be greater than Pogs, Pokemon, and Yo-yos combined. They make you feel like Buzz Aldrin, and make Sketchers’ ShapeUps look conservative.  I’m referring, of course, to Kangoo Jumps (KJs). Already rumored to be featured on the Richard Simmons comeback exercise video (full disclosure: the author started this rumor…right now), Kangoo Jumps are taking State College by storm, in all their goofy glory.

Save the Boobs!

CATA Manager Gets Recognized


Shea Moyer Lifts Penn State Women’s Soccer Past West Virginia 1-0

Sophomore midfielder Shea Moyer scored the game-winning goal in the 80th minute of a rainy season opener at Jeffrey Field.

Penn State Women’s Soccer Poised For Strong 2018 Season

Incoming Penn State Track & Field Athlete Kristian Marche Shot To Death In Philadelphia

Former Women’s Gymnastics Coach Files Lawsuit Against Penn State Over Handling Of Abuse Allegations

Men’s Soccer Trio, Reading United Win PDL Eastern Conference Title, Fall Short Of National Championship

Student Life

Student Body President Cody Heaton Welcomes Class of 2022 At Convocation

UPUA President Cody Heaton welcomed the incoming Class of 2022 Saturday evening with an inspiring speech.

Start The Semester Off Right With These Welcome Week Activities

Nike Releases New Penn State Sneakers

Plans Submitted For New KFC In State College

Developers have submitted preliminary land development plans to build a new KFC restaurant at 1780 S. Atherton St. in State College.

Join Onward State: Fall 2018 Application

Onward State is hiring for the fall semester and we’d love to have you join us.

Penn State Officially Welcomes Class Of 2022 At Convocation

The Class of 2022 joined the Penn State family Saturday evening at Convocation.

Be the first to know

  • Top posts and the best Penn State stories

Thank you for subscribing.

Something went wrong.

Assessing Penn State’s Front Seven Following Tuesday’s Medical Retirements

Penn State’s defensive line rotation will be shaken up following Ryan Buchholz’s medical retirement from football, while the coaching staff is letting the linebackers duel it out during camp.

Send this to a friend