What many did not realize is that higher education pro-
visions were added to the Healthcare Act. Key provisions of
the education reform portion of the bill include the ending
of subsidies to special-interest private
lending companies, cutting out the
middleman and decreasing the cost
of school loans. Under the former pro-
gram banks could act as the interme-
diary for federally subsidized student
loans, collecting billions of dollars in
federal subsidies, protecting either
government money or bank money
from default. Under the new program,
starting July 1, 2010, banks can still
offer student loans, but they are not
guaranteed by the government. Cut-
ting out the middleman will make
more money available for more and
cheaper student loans, coming direct-
ly from the government.
The extra money from decreased bank subsidies will go to
more and larger Pell Grants, which target low- and moderate-
income students. The Act includes $36 billion over 10 years
to increase the maximum Pell Grant to $5,550 in 2010 and
$5,975 by 2017, and the number of available grants will nearly
double. The Pell Grants will be indexed to the Consumer Price
Index starting in 2013, to match the rising costs of college.
Another important provision is that the Act expands the
Income-Based Repayment program. Starting in 2014, the
bill will cap new borrower’s loan payments at 10 percent of
their net income, after adjustments for basic living costs, and
would forgive any remaining debt after
20 years, instead of the current 25 years.
This will ensure that every graduate can
make their school loan payment, there-
fore decreasing the amount of student
loan defaults and saving graduates’ cred-
it ratings. Public service workers (teach-
ers, nurses, police officers) or those in the
military will see their loans forgiven af-
ter 10 years.
Funding of $2 billion over four years
was provided to community colleges
to develop and improve educational or
career training programs. If you were
thinking of getting that Airframe and
Powerplant certificate, now may be a
good time to do so! ✈
The extra money
from decreased bank
go to more and larger
Pell Grants, which
target low- and
Where Did You Fly Last Weekend? Where Did You Fly Last Weekend?
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Dr. Sherry Parshley is founder of Sierra Papa Aviation
Consulting LLC, which provides a broad range of services for
litigation involving General Aviation, Major and Regional
Airlines. Parshley is a commercial pilot, certified flight instructor
and co-builder of an RV- 8 aircraft. She resides in Phoenix,
Arizona. Questions for her? She can be reached at sherry@
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