How Student Loan Reform Makes College Affordable for Kentuckians

Via Jake at Page One, lots of wonderful things for Kentucky's college students and their parents in the new student loan reform.

Some highlights, according to the White House:

Increases Pell Grants - Between 2013 and 2017 the award is expected to rise from $5,550 to $5,975. By academic year 2020-2021, the Department of Education estimates that Kentucky students will receive an additional $480 million in Pell Grants.

Expands Income Based Repayment - After July 1, 2014, students will be allowed to cap their loan repayments at 10% of their discretionary income and can have their balance forgiven after 20 years. 1.2 million borrowers are projected to qualify and take part in the IBR program between 2014 and 2020.

Increases Support for Minority Serving Institutions - The act provides $2.55 billion to Historically Black Colleges and Universities and Minority Serving Institutions over the next decade. HBCUs and MSIs in Kentucky will be eligible to receive an additional $9.4 million in funding.

Funding for College Access Grants - the act increases mandatory funding for the existing College Access Challenge Grant Program to $150 million per year over the next four years. Kentucky is expected to receive roughly $10 million in additional funding.

Investments in Community Colleges & Career Training - $2 billion over four years will be provided for community colleges. The funds will help community colleges and other institutions develop, improve and provide education and career training programs suitable for workers who are eligible for trade adjustment assistance. Each state, including Kentucky, will receive half a percent of the total funds appropriated for the program each fiscal year.

The education-related provisions of the Health Care & Education Reconciliation Act are fully paid for by ending government subsidies currently provided to financial institutions making federal student loans. Ending the subsidies will free up about $68 billion, according to the Congressional Budget Office. Kentucky and its students are expected to receive more than $500 million by academic year 2020-2021 in additional benefits for higher education.

This is huge. Instead of forcing students to seek the most remunerative professions or face a lifetime of crippling loan payments to private lenders, this bill allows students to borrow affordably, and to choose professions - like teaching, health care, law enforcement or other kinds of public service - that pay less but offer greater rewards.

I would not be at all surprised if in 10 years, we see that student loan reform had a greater positive impact on the economy, on college graduates and on the nation as a whole than even health care reform.