The Health Care and Education Reconciliation Act of 2010 (H.R. 4872) is a reconciliation bill passed to make changes to the Patient Protection and Affordable Care Act. It was signed into law by President Barack Obama on March 30, 2010. The bill also includes the Student Aid and Fiscal Responsibility Act, which was attached as a rider.
Since only one reconciliation bill can be passed each budget year, the Democratic leadership decided to attach the House-passed Student Aid and Fiscal Responsibility Act to the bill since it also faced a tough road through the Senate due to Republican filibuster and opposition from several centrist Democratic Senators. The move was also thought to give President Obama two key victories in overhauling the health care and student loan system. It also eventually became clear that the budget savings caused by the student loan bill would become essential to the overall reconciliation bill by reducing the deficit enough for the overall bill to qualify for the reconciliation process.
Student loan reform
Title II of the reconciliation bill deals with student loan reform. The language is very similar to the Student Aid and Fiscal Responsibility Act that passed the House last year; but with some slight variation. The reform package includes:
Ends the process of the federal government giving subsidies to private banks to give out federally insured loans. Instead loans will be administered by the Department of Education.
Increases the Pell Grant scholarship award.
For new borrowers of loans starting in 2014, those who qualify will be able to cap the amount they must spend on loan repayment each month to 10% of their discretionary income (current cap is 15%.)
Also, for new borrowers after 2014, loans will be eligible to be forgiven to those who make timely payments after 20 years (the current time-frame being 25 years).
Will make it easier for parents to take out federal PLUS loans for students.
Several billion will be used to fund historically poor and minority schools, as well as increasing community college funding.
Education Reconciliation Act Ends Banks’ Role as Middlemen to Student Loans
Posted by College Spot in College Finance
The Health Care and Education Reconciliation Act of 2010 (H.R. 4872) is a reconciliation bill passed to make changes to the Patient Protection and Affordable Care Act. It was signed into law by President Barack Obama on March 30, 2010. The bill also includes the Student Aid and Fiscal Responsibility Act, which was attached as a rider.
Since only one reconciliation bill can be passed each budget year, the Democratic leadership decided to attach the House-passed Student Aid and Fiscal Responsibility Act to the bill since it also faced a tough road through the Senate due to Republican filibuster and opposition from several centrist Democratic Senators. The move was also thought to give President Obama two key victories in overhauling the health care and student loan system. It also eventually became clear that the budget savings caused by the student loan bill would become essential to the overall reconciliation bill by reducing the deficit enough for the overall bill to qualify for the reconciliation process.
Student loan reform
Title II of the reconciliation bill deals with student loan reform. The language is very similar to the Student Aid and Fiscal Responsibility Act that passed the House last year; but with some slight variation. The reform package includes: