The New Cost of a College Degree

A college degree is becoming more essential than ever. Nowadays people who couldn’t find jobs are going back to school. Enrollment numbers continue to soar due to the high unemployment rate throughout the US. One out of ten New Yorkers still can’t find jobs. The competition to find jobs is as fierce and competitive as ever.

Having a college degree will give you an advantage over other applicants. It’s also a proven fact that having a college degree will help you earn more money during your life time. According the U.S. Census Bureau population surveys from 2000, a high school graduate will make $1.2 million dollars in life earnings. Meanwhile a person with a bachelor degree will make about $2.1 million dollars.  The survey depicts that a college degree correlates directly to your salary earnings.  The US government has taken many actions to spur economic growth and bring down the unemployment rate, including passing a wave of stimulus packages.

The passing of the health care bill provides the federal government another way to accomplish this. The health care bill will put the government in charge of 1/6^th of the US economy. It also will allow the government to fully control college loans.

With the passing of the bill, government will be officially standing in the way between you and your college loans. Since 1965, the Federal Family Education Loan Program was the most popular loan chosen by parents and students to get college degrees. The FFELP loans were funded by a private sector and only recently because of the economic recession was being helped out by the government. The FFELP was chosen four times as much by students as the fully government funded Direct Loans.

So why was this the case? Well, the FFELP loans usually had lower interest rates and lower fees. Direct Loans would cost a college student more money to get a college degree. This is the reason millions of people chose to use FFELP loans. However, the FFELP loans were eliminated with the passing of the healthcare bill. With the passing of this bill the government run education ministry will now be in charge of handling over 100 billion dollars in student loans every year. The bill will now require universities and college to use direct lending. So now money will be supplied directly from the government, cutting out the middle man, or banks. Colleges in Europe already use this method in lending money out to its students seeking a college degree. The EU claims that this method is more efficient than its old lending methods. Schools that were not using direct lending will now have to revamp their lending methods. Meanwhile, some school were already only using  direct lending and won’t even notice the difference with their student loans and the passing of this bill.

The government will increase its reach and add to its resource pool with this bill. The college loan system has essentially been running the same way for some years now, but with the passing of the healthcare bill, big changes are in order.

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The Pell Grant and the U.S. Healthcare Bill

The media seems to be focusing soles on the advantages and disadvantages of the healthcare bill and the elimination of the Federal Family Education Loan Program student loans. What’s getting lost in the shuffle is the Pell grant. It’s a widely held perception that the average cost of all college degrees for students around the United States will increase if this monumental health care bill is passed. This is not completely correct. The average cost of attending college will increase for some Americans, especially the upper middle class. However, for poor and underprivileged kids the cost of attending college will decrease significantly. Why is that? This is because of the aforementioned Pell Grant.

What is the Pell Grant and how much money can someone receive?

The Pell Grant first came into use in 1965 after the Higher Education Act was passed through congress. The Pell Grant program is an educational federal subsidized program of the United States Dept of Education. Unlike loans, a Pell Grant does not need to be repaid. The students eligible for Pell Grants come from families who wouldn’t be able to pay for college without outside assistance.  Many of these families are minorities from low income neighborhoods. The maximum amount of money awarded through Pell Grants has been slowly increased from $4,050 in 2003 to $5,350 in 201