SMH that I couldn’t have come up on this lick when I was on the hill…but I digress. This is good news, though. Peep.
WASHINGTON — Florida A&M University and other historically black colleges in the state will get an additional $61 million over the next decade under legislation that President Barack Obama signed into law Tuesday.
Under the new law, the federal government will process all student loans and distribute grants and other aid to students rather than paying banks to do so.
“We need to invest that money in our students,” Obama told students at Northern Virginia Community College. “By cutting out the middle man, we’ll save American taxpayers $68 billion in the coming years.”
The money Florida will get is included in $2.55 billion for minority colleges and universities, according to the House Education and Labor Committee. About 60 percent of 4.7 million minority undergraduates nationwide attend historically black colleges, according to Melody Barnes, director of Obama’s Domestic Policy Council.
The additional funding will allow those institutions to reduce class sizes and improve programs, she said.
“Over time, these colleges and universities have tended to do a lot more with a lot less,” Barnes said. “These dollars will allow them to help shore up their programs.”
Republicans criticized the new law, saying the government will keep student-loan interest rates as high as they are now, even though it will spend less than private lenders providing the loans. And they said the money the government saves won’t be returned to students.
“Nineteen million college students are going to be unhappy when they find out that this latest Washington takeover overcharges them on their student loans to help pay for the new health care law and other government programs,” said Sen. Lamar Alexander of Tennessee, chairman of the Republican Conference. “Any savings should go to the students, not the government.”
Republicans also raised concerns that eliminating the role of private lenders in the student-loan business will cost jobs, including possibly 600 at a Sallie Mae loan processing center in Panama City.
But Education Secretary Arne Duncan said private companies will continue to service the loans.
“This is the right thing to do for the taxpayer,” Duncan said. “This is just a remarkable opportunity.”
The higher-education legislation was attached to a package of health care reform provisions. It will distribute about $68 billion over 10 years, including $40 billion in larger Pell Grants for financially needy students.
The amount of the maximum annual Pell Grant will grow from $5,550 this year to $5,975 by 2017. That will send an additional $70 million over the next decade to 2nd Congressional District represented by Rep. Allen Boyd, D-Monticello, according to the House Education and Labor Committee.
In addition, graduates repaying a student loan won’t have to pay more than 10 percent of their income above a living allowance. Until now, the maximum was 15 percent. The living allowance is about $16,500 for an individual and $33,000 for a family of four.