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Update on Pell Grant Program

Description: As a part of the Health Care Reform bill signed into law by President Obama this week, the federal program that provides Pell grants to millions of middle and lower income college students got a strong boost. The legislation includes a major overhaul of federally backed student loans. From now on, borrowers will go directly to the federal government for these loans, and not to banks or other lenders. While this will have little effect on student borrowers, it will make college

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loans that parents take out for their children slightly cheaper and easier to get. Of the $61 billion the government expects to save by cutting subsidies to banks for student loans, $36 billion will go the Pell grants. The legislation also allocates $2.5 billion to historically black colleges, $2 billion to community colleges and at least $10 billion to reduce the federal deficit. The additional funding will increase the maximum grant to $5,500 this year, and eventually to $5,975 by 2017. The legislation also adds an annual cost-of-living increase that would take effect in 2013. In the 2007-2008 school year,

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7.3 million students received Pell grants, out of 14.6 million who applied. A decade ago, 4.9 million students received the aid. Pell grants are generally available to families earning less than $60,000 a year. The student loans changes will take effect July 1st. contenet provided by the CCA

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