02.27.09 | How Does Obama’s Budget Plan Affect Me?
It doesn’t, at least not in 2009. But President Obama has proposed a couple of key changes that are turning a few heads for the 2010 academic year.
Pell Grants: The key is to get more funds into the hands of those students with the greatest financial need. No one wants to see a student deprived of going to school based on limited funds.
The blueprint proposes making the Pell Grant program a mandatory spending program that automatically increases with the Consumer Price Index plus 1 percent, opposed to the current system, which is a standard fixed amount.
Eliminating the Federal Family Education Loan Program (FFELP): This is the ire of great debate. Obama wants to eliminate the FFELP program in favor of the Direct Loan program.
The FFELP program extends into the private sector affording many lenders the ability to lend funds to students, while the Direct Loan program is run through the government.
Phillip Day, President and CEO of NASFAA, expressed concerns about the dissolution of the FFELP Program. “Recently, the freezing credit market has created instability in the FFELP causing great anxiety for students, parents and colleges about the continued availability of student loans.” The key is to ensure multiple funding options are available.
Students and parents should not be negatively impacted by losing FFELP participant-provided services like college access programs, financial literacy education and loan delinquency and default prevention.”
It’s important to note that the changes recommended by the Obama administration are not certain. The president’s budget provides a blueprint for Congress. Congress will ultimately decide what is included in the final FY 2010 budget.
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I agree, what with the escalating price of colleges, something must be done to help people to afford it. However, another issue, too, is how FAFSA and those other financial aids determine the person’s eligibility for financial help. They look at the family’s income. This poses an issue for people like me, who come from big families (there are nine people in my family). My father’s salary is too high to apply for many of the need-based scholarships. But, he has to support a family of nine! I have SIX more siblings going to college after me, which means that money is very tight. I just pray that in the future, these things are considered.
March 7th, 2009 | #
I would like to know if there is any plan to help those that have graduated. I am unable to pay my student loans and had to get a job that was not related to the field I graduated in, in order to pay my bills. Because of the economy people just aren’t able to pay for my services. My student loans will be a total of $100,000 by the time I am done paying them off. Is there anything that the goverment would do to help me?
May 7th, 2009 | #
I have the same concerns. I just recently graduated and I have been working for minimum wage since then. FAFSA managed to help me out a little because I have 4 siblings and 2 cousins that are under custody, but only because the head of household is self employed. Because of the type of loan I have, the capitalized interest makes the principal grow as rapidly as my monthly payment. I’m looking at paying around 35,000 by the time I am done paying them off.
August 12th, 2009 | #