While college students shut off their laptops, sold their textbooks, and headed toward the beach for spring break, President Obama and Congress enacted a new healthcare law, a task that has eluded lawmakers for over 50 years.
The new bill, signed into law on March 22, will make health care accessible to all Americans and will also include specific reforms directed at college students, specifically an overhaul of the federal student loan system.
The legislation — shunned by Republicans and passed by Democrats only — will allow all Americans to purchase affordable health insurance and will enable the federal government to offer more Pell Grants, which are cheap student loans that are easier for students to pay back. The two reforms make affordable healthcare and a college education, now staples for a sustainable and successful life, a tangible attainment for millions more Americans.
This reform will create a healthcare system accessible for all Americans while outlawing the worst abuses by health insurance agencies. Effective this year, insurance companies cannot drop you from your health plan if you get sick, and by 2014, uninsured Americans will have access to a competitive insurance exchange marketplace where people can compare prices for the best deal on an insurance plan they like.
This reform is a huge step forward from the current system where 30 million of 300 million Americans are uninsured.
Beginning in 2014, all Americans will be required to purchase health insurance. Those who cannot afford to pay for it will have their insurance subsidized. Also, insurance companies will be barred from dropping patients because of preexisting conditions.
Most importantly for students, this law will allow young people to stay on their parent’s health insurance until they are 26 years old, without the current stipulation that they must also be enrolled in school. So even after you decide to graduate, travel the world, start your own company or are in-between jobs, you will still have health insurance.
Republicans tried their hardest to mischaracterize the bill. They fought tooth and nail against so-called death panels, and scared seniors into believing the bill would cut their coverage. They warned of a massive governmental takeover. However, it is evident that this law contains many Republican ideas and also mirrors a bill signed by Republican governor Mitt Romney in Massachusetts. Their opposition to this bill was more political than substantive, and many tried to delegitimize Obama and Democrats rather than offer any real solutions.
Included in the bill was also a reform to the federal student loan program, making it easier for struggling students to afford college education and pay off their debt when they graduate.
The law expands individual Pell Grants, doubling its funding while expanding the maximum Pell Grants given to students by around $500. More students will have a shot at higher education, and the rising loans will help combat rising costs.
It also ends a federal subsidy for banks that make loans to college students, so students will get loans directly from the federal government. This will not only save taxpayers money, estimated in the billions, but also keep interest rates for these loans low and affordable.
Paying back these loans will now be easier too.
The law institutes loan forgiveness programs for graduates. Federal student loan repayments will now be capped at 10 percent of a student’s income and loans will be forgiven after 20 years of payment. Students who pursue public service employment will have their debt forgiven after 10 years.
Republicans called the federal student loan reform “another government takeover,” but they miss the point of these loans in the first place. The purpose of this law is to provide a college education to students from all backgrounds, not to help banks. With the federal government extending these loans, interest rates will be lower than a bank’s because the government will not be looking to profit.
If you are one of the thousands of students overburdened with loans, talk to your college financial aid offices and take advantage of this reform.