New Health Care Reform Law Strips Banks Of Student Loans

By: AP
By: AP

WASHINGTON (AP) - President Barack Obama has signed a law that
finalizes his health care overhaul and makes the government the
issuer of all federal college loans.

The president completed the measure at Northern Virginia
Community College, where he emphasized new help for college
students.

The legislation was the second of two steps needed for the
Democratic-led House and Senate to approve a health care package
affecting virtually all Americans. The new law makes a series of
fixes to the one Obama approved last week. It removes some
unpopular provisions among other changes.

In the same swoop, Democrats added in a rewriting of college
aid, called the "SAFRA Act".

The SAFRA Act strips banks of their ability to issue federal
student loans in favor of direct government lending. The Congressional Budget Office says this direct-lending approach will save taxpayers about $61 billion over the next 10 years.

The SAFRA Act also increases the Pell grant program by $36 billion over the next 10 years. The act will also make it easier for students to pay back these new student loans, by reducing the amount of income devoted to paying back student loans from 15% to 10%.

More Information on the SAFRA Act is Available Here:

Thorough Summary Info - "Student Loan Overhaul Approved by Congress" (NYTimes.com)

The "SAFRA Act" Pages from the Bill Itself - The SARFA Act - Official Text from H.R.4872 Bill (NYTimes Documents)

The Entire Bill from the US Government Printing Office ("SAFRA Act" appears on page 43 of this pdf) - Certified Official Text from H.R.4872 (US Government Printing Office)


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