Promising Changes Ahead for College Financial Aid

When Barrack Obama campaigned for President, one of his platforms was to make a college education affordable for everyone. Last March, he signed the Health Care and Education Reconciliation Act, which includes many of the ways he wants to make education more accessible. There are actually six points, which he hopes to have turned into law and/or policy by 2012. Many are unaware of the many benefits provided by these six items.

(1) Create an Education Credit - Otherwise called the American Opportunity Tax Credit. This credit will ensure that $4,000 of a college education is completely free by making it fully refundable come tax time. Obama believes it covers two-thirds the matriculation costs for a public institution. To compensate for the credit, recipients will be required to conduct 100 hours of public service a year, either during the school year or over the summer months. This proposal is still in the air.

(2) Simplify the Financial Aid Process - Obama believes getting federal grants and scholarships is more difficult than filing income taxes. The FASFA form needs to be simplified. His research believes it stops people filing for the Pell Grant, HOPE and Lifetime Learning tax credit programs. They even are talking about eliminating the FASFA altogether. Obama wants to put a simple box on the income tax form. Check that box off and it allows the IRS to send relevant information for the Pell and other money.

(3) High School Preparation Tests - Obama believes many high school students are not what he calls "College Ready". He's proposed creating a voluntary test. With the results, a student will know what they need to be ready for college and still have the time to prepare for it.

(4) Increase The Pell Grant - Obama's Reconciliation Act is a start, thanks in part to the last point. It includes plans to increase the Pell from a ceiling of $5,350 to hopefully slightly under $6,000 next year. He has also promised to set up a system where the Pell will be increased annually based on the current cost of college.

(5) The Community College Partnership Program - This is also part of the new Reconciliation Act. Obama feels community colleges have approximately 50% of all students. The Act calls for the start of what he's calling a Community College Partnership Program. Its goal is to strengthen community colleges by providing grants. The school must be Title IV accredited, and according to sources inside the Board of Education, this also includes online schools.

(6) Eliminate Federal Family Loan Program - This has many banks screaming bloody murder. With the Reconciliation Act, Obama has discontinued the Federal Family Loan System due to its high cost to both the government and the students. All loans will now be done through the already existing Direct Loan system. Obama projects this will create an incredible amount of savings, as well as generate revenue, with the profits going to the Pell.

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