The loan revisions were attached to a separate bill that included the House changes to the original Senate health care bill. While President Barack Obama on Tuesday, March 23, signed the health care bill, the Senate must still approve the companion bill that includes the loan changes.
Backers of the changes say the federal government will save $61 billion during the next decade. Much of the savings will be used to increase Pell Grants, which offer grants to low-income students.
“We believe the move is the best for our families and students, as well as all taxpayers,’’ said Kathy McEuen Harmon, executive director of financial aid and student success at UD, said in a statement.
Harmon said university officials had decided even before Obama was elected to change from private lenders to direct loans from the federal government. The changes are scheduled for the fall of this year.
Ohio State University has relied on direct lending for years. Wright State announced in January it would adopt the federal direct loan approach for the summer quarter.
More than 11,700 students at Wright State receive some form of federal loans.
“It was clear that the direct loan program was a better option for our students,’’ said Jennifer Penick, director of financial aid at Wright State
Private banks and Sallie Mae have objected to the changes, in large part because financial institutions made money on student loans. Sallie Mae officials have warned that if the bill becomes law, they will eliminate 2,500 of their 8,600 employees.
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