Home > News, Policy > Obama Wins – What Can We Expect for Student Loans?

Obama Wins – What Can We Expect for Student Loans?

As I’m sure you all know by now, Obama has been elected the new president of the United States.  So what will an Obama presidency mean for student loan reform?  It’s too soon to tell, but a review of some of his past statements might be instructive.

In a May 2007 interview with the Yale Daily News, Obama “vowed to overhaul the aid system in order to curb corruption by eliminating the middleman between the federal government and students seeking loans.”   In that interview, Obama argued that the current student loan system benefits private lenders at the expense of students.

Also in May 2007, the Boston Globe reported that Obama said that he would like to see student loans centralized under the federal government and end the practice of federally guarenteed bank loans.  “It is long past time to put an end to the rampant abuse by lenders of our student loan programs,” he said.

By June 2008, Obama was making more specific policy proposals.  As reported in NextStudent’s Student Law Blog, he supported a $4000 college tuition tax credit in exchange for 100 hours of community service, expected to cost about $10 billion annually.

While in Congress, Obama also sponsored a bill that would have increased the amount of funds available in Pell Grants by 26 percent, from $4050 per year to $5100 per year with additional increases built in for inflation.

Most recently, in an interview that aired on MTV this past Monday, Obama reasserted his $4000 tax credit plan and talked about loan forgiveness for certain professions like teaching and nursing.  He did, however, seem to hedge his words a little on people who already owe substantial loans that they are having trouble paying.

It will be interesting to see how many of Obama’s plans he is able to implement and whether, as he eases into the role of President, he will take a more or less aggressive stance on student loans and the cost of education.  We have a new President, but only time will tell if we get real change.  Here’s to hope.

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