By Laurel Brishel Prichard - University of New Mexico/Talk Radio News Service
Secretary of Education Arne Duncan gave hope to current and future college students Wednesday, saying the Obama administration wants to increase funding for federal student loans as well as prevent banks from profiting from individuals enrolled in universities.
"Americans want to invest in their children and their future. Not in profit for banks," said Duncan.
Under a proposal recently put forth by the administration, banks would stop receiving federal tax subsidies, and students would go directly to the government for their school loans. The proposal would also reward students with capped interest rates, which would drop from 15 percent to 10 percent. In addition, students would see their loans be forgiven after 20 years, five years less then the current time period in place, and graduates that work in the public sector working in rural or inner city communities after they finish school would have their loans erased after 10 years.
"This is a once in a generation opportunity," said Duncan.
The estimated savings under the proposal would amount to nearly $87 billion over the next 10 years, according to Duncan. Those savings would be put toward more education programs and additional funding for Pell grants, which provide funding to low-income students.
"We have to get many more people into college today and it's never been more difficult for families to overcome that financial hurdle. We have a chance to fundamentally break through. This is a real game-changer," said Duncan.
Student Loan Reform Proposal Is Real "Game-Changer," Says Education Secretary
Secretary of Education Arne Duncan gave hope to current and future college students Wednesday, saying the Obama administration wants to increase funding for federal student loans as well as prevent banks from profiting from individuals enrolled in universities.
"Americans want to invest in their children and their future. Not in profit for banks," said Duncan.
Under a proposal recently put forth by the administration, banks would stop receiving federal tax subsidies, and students would go directly to the government for their school loans. The proposal would also reward students with capped interest rates, which would drop from 15 percent to 10 percent. In addition, students would see their loans be forgiven after 20 years, five years less then the current time period in place, and graduates that work in the public sector working in rural or inner city communities after they finish school would have their loans erased after 10 years.
"This is a once in a generation opportunity," said Duncan.
The estimated savings under the proposal would amount to nearly $87 billion over the next 10 years, according to Duncan. Those savings would be put toward more education programs and additional funding for Pell grants, which provide funding to low-income students.
"We have to get many more people into college today and it's never been more difficult for families to overcome that financial hurdle. We have a chance to fundamentally break through. This is a real game-changer," said Duncan.