Representing a complete overhaul of how the federal government helps students attend college, the Student Aid and Fiscal Responsibility Act of 2009 cleared the House this week and is now headed to the Senate. The bill would essentially cut banks out of the federal student loan program and make the government a direct lender, which supporters contend will save Washington $80 billion over 10 years. That savings will then be used to fund numerous education-related efforts, not all of which will affect college students.

The government plans to spend $40 billion to boost Pell Grants to $5,550, and provide annual adjustments that will be based on the Consumer Price Index plus 1%. The Perkins Loan Program will be expanded to make more students eligible, and $10 billion will be spent on community colleges as part of President Barack Obama’s American Graduation Initiative intended to educate five million more two-year college graduates by 2020.

The administration also plans to spend $8 billion of the savings to strengthen early childhood education, and another $4.1 billion to modernize and repair schools and colleges, including those damaged by Hurricanes Katrina and Rita.
                                                                                                                                    -Noel Brinkerhoff

House Passes Student Aid Bill (Inside Higher Ed)
House Passes Bill to Expand College Aid (by Tamar Lewin, New York Times)