Congress Delivers Loan Relief for Needy Students

Congress yesterday passed a student loan reform bill that slashes billions of dollars from lender subsidies and redirects the funds into grants for low-income students, the New York Times reports. The sweeping measure will cut $20B from federal lender subsidies, halve the interest rate on need-based loans, and pump $12B into Pell grants for needy students.

Strong majorities in both houses approved the bill, which also offers loan forgiveness for teachers, police officers, and other public servants. Loan industry reps and House Republicans decried some of the provision as irresponsible and socialistic, with Democrat Ted Kennedy countering that the bill simply “restores the balance to this grossly unfair student loan system.” (More student loans stories.)