Student loan changes included in health care reform bill

The newly-passed health care reform bill carries a number of key changes for college students. While some changes will not directly affect Luther students, many institutions across the country will experience changes in their health care.

On Tuesday March 30, President Barack Obama signed into effect a new health care reform bill, portions of which pertain specifically to Americans in the college demographic.

One change extends the age for students to be covered by their parent’s health insurance to 26, which provides continued health care coverage to recent graduates throughout their beginning years of employment.

Among other changes is the elimination of the Family Federal Education Loan Program. This program served as an alternative to the direct lending program that many schools, including Luther, have used for student loans.

When using the FFELP, students were required to get their loans by going through an approved list of banks, which were subsidized for their participation. Without the FFELP, all student loans will now come through direct lending from the federal government. The government believes this change will save large amounts of money for taxpayers and will possibly create more available money in the form of Pell grants for students who apply.

Schools have until July 30 to adjust their financial services to the direct lending program. Luther, however, has no changes to make. President Torgerson reports that Luther has used direct lending since the 1990s.

“Luther believed it was to the students’ advantage to go directly to the federal government through the Department of Education for loans,” Torgerson said.

The reform bill has also changed the way students repay their loans after graduation. Beginning in 2014, the legislation will cap a graduates’ annual student loan repayment at 10 percent of their income. Janice Cordell, Director of Financial Aid, urges graduating students to know their options for loan repayment.

“As this change [in loan repayment] will not take place right away, we do not have much information available on it yet,” Cordell said. “However, it is important for students to attend their exit counseling session during their senior year to make sure they understand their rights and responsibilities and options for loan repayment.”

The Financial Aid office also encourages students to visit the Direct Loan Servicing Center after graduation to ensure they fully understand the conditions of their loan repayment.