UC San Diego officials say thousands of their students will benefit from financial aid reform thanks to President Barak Obama's health care bill. Tucked inside his health care bill was significant financial aid reform.
Beginning this summer, private banks will no longer act as the middle men between students and the government in federal student loan transactions. Instead, all new federal loans will come directly from the U.S. Department of Education.
Federal officials say the money that was used to subsidize the higher-priced, private lender loans will be redirected to boost the government's Pell Grant program. The grants are designed for low-income college students.
UCSD's Penny Rue said the change means more money for more UCSD students.
“We are very unusual in being a top-tier institution with fully one-third of our students on Pell Grants. So we've always been about access for low-income students. Frankly, Pell Grants are the backbone in that process,” Rue said.
The Obama administration says the new law pumps billions of dollars into the Pell Grants program over a period of four years.
