When President Barack Obama signed the Health Care and Education Affordability Reconciliation Act of 2010, not only did he approve a historic change in the way health care will be offered in America, but he also made a commitment that will mean Historically Black Colleges and Universities (HBCUs) and predominantly Black Educational Institutions (PBIs) will get financial resources badly needed to continue their respective missions. This is an aspect of the health care reform bill that often gets lost in the national debate, said Melody Barnes, director of the White House Domestic Policy Council. The money will be available to the nation's 105 HBCUs that are in good accreditation standing.
Among the most critical changes the legislation puts in place is the award of nearly $1 billion in mandatory funding to HBCUs over the next 10 years. Another $850 million will be awarded to PBIs and $150 million will go to other minority-serving institutions. The money can be used for things including expanded instruction, infrastructure development and for other efforts that will strengthen the universities and colleges. The federal government will begin providing funding to the HBCUs and other minority colleges in October of this year.
The act also invests an additional $40 billion in the Federal Pell Grant program, which will increase the award each student receives as part of an effort to keep up with the increasing cost of a typical college education. This change is slated to begin in 2013.
Furthermore, the additional funding is expected to mean more people who are eligible for the grants will receive them. Another provision of the new law is eliminating the banks and other financial "middlemen" involved in the Guaranteed Student Loan Program so that young people are now applying directly to the Federal government for their school funding. This direct lending begins July 1.
Another provision of the bill will enable students to more easily repay their student loans, according to Barnes. "It also expands the income-based repayment program to make sure that paying back the loan is more manageable," explained Barnes. "The average student has about $23,000 in college debt, and sometimes the burden can become too heavy."
This law now caps the repayment amount at 10 percent of a graduate's discretionary income, and anyone with debt remaining after 10 years, who is working in a public service job, can have the debt forgiven. For others who keep up payments, the debt can be forgiven after 20 years.
Finally, the legislation will provide $2 billion across the next four years to community colleges to enable them to develop, improve upon, and provide education and career training programs.