Washington - U.S. Senator Robert Menendez (D-NJ) today hailed the Senate passage of student loan reform legislation, which will establish a Direct Loan program to eliminate huge subsidies for big banks and private lenders and reinvest those savings into education programs that make college more affordable. Specifically, it will provide a boost in the maximum available Pell Grants by investing $36 billion over 10 years in the program. Menendez, a recipient of Pell Grants during his educational career, said following the vote that the reforms to and increased support for student loan programs will give more New Jersey students access to a higher education and will make the state and nation more economically competitive.
"There are two main reasons that I was able to become a member of the United States Senate and cast a vote in favor of this landmark student loan bill today," said Menendez. "One was a caring family that instilled in me the importance of getting a quality education. The second was the existence of Pell Grants. There is an entire new generation of New Jersey leaders in the sciences, business, the arts and government that will be able to receive a higher education as a result of this landmark reform. A good education should be a right, not a privilege for the wealthiest among us. In the face of rising tuition and a tough economy, we are making it more affordable to receive a full education. This will allow for more young New Jerseyans to prosper and it will spur the ideas and innovation that create jobs and economic competitiveness."
New investments in Pell Grants increase the maximum scholarships available to $5,550 in 2010 and $5,975 by 2017. Also, all new federal student loans will be originated through the Direct Loan program instead of through the federally?guaranteed student loan program beginning in July 2010. The Direct Loan program provides the same services to students, but saves $61 billion that would otherwise be wasted on subsidies to big banks and private lenders.
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