CONWAY, SC (WMBF) – A new federal law will alter the framework of the student lending industry by cutting out banks as a middle man, and its already being well received by local students and administrators.
The new legislation is a part of a package of fixes to the healthcare reform bill signed by President Barack Obama. Instead of going through a bank to get a federal student loan, students will receive their money directly from the government.
Ashleigh Mitchell, a junior at Coastal Carolina University, says she supports the new legislation.
"I receive $3,500 a year from federal stafford loans, which I do use towards my education," explained Mitchell. "It's tough after you graduate to figure out how you're going to make money to pay back the student loan, not just the student loan but the hundreds of dollars that are stapled onto it in interest."
With tuitions costs rising year after year, Terrence Parsons, another CCU student, says he's come to depend on loans.
"Unless you're grossing probably like a $100,000 a year, you're not going to be able to pay $30,000 in tuition," said Parsons. "That's a lot of money to just have and be able to spend, so it makes it hard on families."
Since the government used to pay a fee to the banks to distribute these loans, the White House anticipates it will save more than $60 billion over the next 10 years. This money will be used to support career training programs at community colleges like Horry Georgetown Technical College, and administrators there say they're looking forward to the extra aid.
"If it can better assist students in terms of their accessibility and being able to afford college obviously we could not support it more, " said Harold Hawley, the vice president for business affairs at HGTC.
Changes under this new bill will go into effect beginning July 1.