The president's student aid reform plan will save tens of billions over the next decade. We'll use these savings to make college more affordable for the next generation of engineers, teachers, and scientists who will become the backbone of the new economy.
The House has passed the Student Aid and Fiscal Responsibility Act. This legislation will end bank subsidies and invest in students directly. The Senate is still working on its bill.
The House bill will increase Pell Grant scholarships to $5,710 in the next fiscal year. It will guarantee that Pell Grants keep pace with the rate of inflation. It will eliminate unnecessary questions from the financial aid forms, making it faster and easier for students to qualify for federal grants and loans.
This legislation also promises an historic investment in community colleges, helping these essential schools take Americans from all backgrounds and equip them to succeed. Finally, it will improve the quality of early learning programs, which are critical to America's educational success.
All of this will be possible by eliminating the student loan subsidies. We will end the loans under the Federal Family Education Program and make them directly to students -- just as economist Milton Friedman proposed 50 years ago, and just as the Department of Education has been doing since 1993 through the Direct Loan Program.
For future lending, we have hired experienced companies to service all new student loans and collect them for us. We selected these companies through a competitive process.
The shift is underway, and it is proving to be a remarkably smooth transition. In the past two years, our Department has issued more than $50 billion in student loans. Over 2,300 colleges and universities participate in the direct lending program -- an increase of 1,300 over the past three years.
It's time to do what's right for taxpayers -- move our money from bankers to students.
thinkahol * on 23 Sep 10To visit China today as an American is to compare and to be compared. And from the very opening session of this year's World Economic Forum here in Tianjin, our Chinese hosts did not hesitate to do some comparing. China's CCTV aired a skit showing four children - one wearing the Chinese flag, another the American, another the Indian, and another the Brazilian - getting ready to run a race. Before they take off, the American child, "Anthony," boasts that he will win "because I always win," and he jumps out to a big lead. But soon Anthony doubles over with cramps. "Now is our chance to overtake him for the first time!" shouts the Chinese child. "What's wrong with Anthony?" asks another. "He is overweight and flabby," says another child. "He ate too many hamburgers." That is how they see us.
