Landmark Student Loan Legislation: SAFRA

Yesterday, President Barack Obama signed a landmark federal law which dramatically affects the cost and availability of student loans. That’s exciting news for many Connecticut students searching for ways to support their dream of going to college. Effective July 1, 2010,  the Student Aid and Fiscal Responsibility Act (SAFRA) will require all federal student loans to originate through the more reliable Direct Loan program, yielding over $61 billion in savings to be passed on to support education. As outlined by the National Association For College Admission Counseling (www.nacac.com), the increased benefits to college-bound students will be greater dollars, lower bowering costs, reduced repayment periods, and stronger incentives. These include: 1) $36 billion to support the Pell Grant program, increasing the maximum award to $5,550 in 2010 and to $5,975 by 2017; 2) $750 million ($7.5 million for Connecticut) to bolster college access and completion support for students; 3) $1.5 billion to strengthen an Income-Based Repayment program that will lower monthly payment caps from 15 to 10 percent of discretionary income after 2014; and 4) $2 billion for community colleges to develop and improve educational or career training programs. In terms of SAFRA’s impact on the future of education, March is going out like a lion. Don’t you agree?