Sunday, March 28, 2010
Washington to Run Student Loans
Congress recently passed a bill to boost need-based scholarships and cheap student loans. Starting on July 1, almost all federal backed student loans will come directly from the federal government. This prevents private lenders like Sallie Mae from making federally backed loans. This will save the federal budget $61 billion over 10 years. From that amount, about $36 billion will be put towards Pell grants to low-income students, and it is these low-income students that will benefit the most from this bill.
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With how expensive school is this is probably needed.
ReplyDeleteGood news. Boosting need-based scholarships and having cheaper student loans will help more people through college and higher education, which will increase the human capital. Eventually contributing to smaller income gaps and higher worker efficiency.
ReplyDeleteIncreasing student loans would help students from relatively poor families to get good education. And as Hairong said, the huamn capital would be increased and thus the total output in the economy would also be increased. This method may also contribute to lowering the unemployment rate by reducing structral unemployment.
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