President’s Budget Would End Bank-Based Student Lending and Significantly Expand Pell Grants

In keeping his promise to help every student afford a college degree, President Obama has signed into law a bill that abolishes the widely used bank-based student loan programs and put the savings toward the Federal Pell Grant. The Pell Grant, unlike a loan, does not have to be repaid. Pell Grants are generally awarded only to undergraduate students who have not earned a bachelor’s or a professional degree. For additional information about student aid, you can choose to visit this web site:

If you are a student or applying to schools, here are other questions to consider:

1) What do I need to do to prepare for education beyond high school?

2) What are the options for financing my education?


By KELLY FIELD, From the Chronicle of Higher Education, February 27, 2009


To the dismay of lenders and the delight of students, President Obama on Thursday unveiled a budget blueprint that would abolish the bank-based student-loan program and use the savings to raise the maximum Pell Grant and make it an entitlement.

The preliminary budget for the 2010 fiscal year, which administration officials say they will flesh out in April, would also provide a $5-billion increase for Perkins Loans, making an estimated 2.7 million more students eligible for the aid and reducing borrowers’ reliance on private loans.

From the Chronicle of Higher Education, February 27, 2009

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