In an effort to make college education more affordable to students, Congress passed the Student Aid and Fiscal Responsibility Act.
The bill, which will be the country's biggest federal investment in college education, will change how student loan programs operate.
The bill was proposed July 15 and passed Sept. 17 with a vote of 253-to-71. Forty billion dollars will be invested in the program over a period of 10 years.
According to FinAid: The Smart Student Guide to Financial Aid, the Student Aid and Fiscal Responsibility Act will strengthen the Pell Grant, re-engineer the Perkins Loan Program and shift to a direct lending process and shift to a direct lending process.
"This will be beneficial to current and future college students," said Will Barrett, a junior in finance. "College has gotten increasingly expensive, and the bill's passage will make it more affordable for all families."
Scholarship money for the Pell Grant will be increased at a steady rate over the next 10 years.
Currently, the maximum grant is $5,350 and by the 2010 to 2011 school year the grant will increase to $5,550.
By 2019 to 2020, the grant will be $6,900.
In addition to the added funds toward the Pell Grant, a College Access and Completion Innovation Fund will be enacted in an effort to improve college completion as well as reduce student debt.
A total of $3 billion will be put toward the fund and will be distributed between State Innovation Completion Grants, College Access Challenge Grant Programs, Innovation in College Access and Completion National Activities and program evaluations, according to FinAid.
Another implication of the SAFRA is that the FAFSA application for Federal Student Aid Loans will be shortened by six questions.
Beginning July 1, 2010, all student loan applications will be made through the Direct Loan program.
With this change, students will be permitted to acquire Direct Loan consolidation loans without providing validation, according to FinAid.
July 1, 2015, will mark the end of subsidized Stafford loans granted to graduate students.
Subsidized Stafford loans will only be available to undergraduate students.
Interest rates on the current undergraduate loans are scheduled to double, moving interest rates from 3.4 percent to 6.8 percent on loans granted after July 1, 2015.
According to FinAid, this change aims to eliminate the subsidized Stafford loan because it is expensive for the government.
"I disagree with the bill's call for an eventual discontinuation of the subsidized Stafford loan," said Chase Schmidt, a junior in English. "While the money spent by the government on subsidizing the Stafford interest could be redirected to making the Pell Grant a true entitlement, I feel that the benefits of the subsidized Stafford loan outweigh the shortcomings."
Changes regarding the Perkins Loan Program will also take place with the SAFRA's passage.
The loan program will become much like that of the unsubsidized Stafford Loan, however with minor changes.
For example, the interest rate will remain at 5 percent, but no longer be subsidized.
According to FinAid, total funding for the Perkins Loan will increase to $6 billion per year.
The government will provide $1.275 billion to historically Black colleges and universities and $255 million to Hispanic institutions over the next five years.
All of this will attribute to decreasing student loan debt, which has risen to an average $25,000 per student.
With the SAFRA's passage, more Americans will be able to attend college at no cost to taxpayers.
"I don't usually agree with many of Obama's ideas or opinions, but I think he may be on to something," said Hannah Zito, a junior in public relations. "One of our country's biggest problems is the lack of jobs available to people, so the passing of this bill may be beneficial. It's a good idea to start at the root of the problem to solve things."
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