How Financial Aid Under President Obama Will Impact You

How Financial Aid Under President Obama Will Impact You
Learn about President Obama's budget proposals, entitled "A New Era of Responsibility," and the provisions outlined that will help community college students access affordable education.

As workers face a bleak economy with high rates of layoffs and low rates of new employment, President Obama has initiated new plans to help workers become more educated to compete in the job market.

In fact, in Obama’s recent 2009-2010 budget proposal, he clearly made college education a focal point for the improvement and success of the United States. Titling this budget proposal “A New Era of Responsibility,” Obama is seeking to provide students with additional financial aid support through both student loan programs and Pell Grant programs. With this approach, current and future college students may be able to save money while preparing for their futures.

An Increase in Aid

Through the proposal, President Obama asserts that the path to an enhanced economy and society is achieved through education. As the document states, college should be more properly funded and supported to, “Make sure that we have a highly-educated workforce and that the opportunity to go to college is not determined by how much money you have.”

To allow all individuals, regardless of income, to gain access to higher education opportunities, Obama’s proposal to increase student loan and Pell Grant financial aid support should stimulate an almost immediate benefit. Essentially, the 2009-2010 budget proposal allows for an increase in the maximum Pell Grant amount for each student. Currently, the Pell Grant maximum was capped at $4,731 per person; Obama has proposed to raise this maximum to $5,350 per person.

This video explains how Pell Grants work.

In addition to boosting the provisions for Pell Grants, Obama also strives to utilize the competitive powers of private lenders, as student loan companies and programs can help support students while saving the federal government approximately $4 billion dollars in the upcoming year. Furthermore, in deepening the support for students, Obama is seeking to make campus-based loans (through a Perkins Loan Program) more widely available at a lower interest rate for college attendees.

Who Qualifies for Obama’s Aid?

While Obama’s plan is seeking to boost student support from an array of financial avenues, not all students may be eligible for each type of assistance. Specifically, in examining Pell Grants, this support is provided by the Federal Government to need-based students only.

According to the United States Department of Education, students who are designated as low-income and who meet additional Pell Grant standards are provided with extra support to ensure all students can access education. The low-income ranking and financial need of each student is determined by the United States Department of Education, as these leaders use a formula to evaluate a variety of personal financial details. To find out if you are eligible for Federal-aid or other loans, students can simply visit the US Department of Education’s Free Application for Federal Student Aid site, commonly referred to as FAFSA.

Students, when filling out information for FAFSA, will report details such as:

  • Annual income
  • Number of people in the household
  • Family members’ postsecondary education history
  • Cost of living/expenses
  • Additional family and personal details

If students are denied Federal financial aid benefits (Pell Grants), then students can pursue a variety of other alternatives. Most specifically, students can apply for direct loans and seek competitive loan rates from private lenders. As banks and other companies seek to compete for your business, students can research various interest rates and plans to find the most cost-effective loans for their unique degree program.

Examining the Bigger Picture

As Diverse Issues in Higher Education reveals, Obama’s new college funding program will devote $2.5 billion to help boost college success and student enrollment. While this initiative aims to help all students who are struggling to pay the soaring costs of a college education, Obama’s plan certainly seeks to provide focused support to individuals who are economically or socially disparaged.

This video offers some strategies for paying for community college.

Ultimately, while underprivileged citizens will be specifically provided with additional support, all individuals should benefit from the President’s plan to spend approximately $500 million over the course of 5 years on boosting college education and retention. With this goal, Obama strives to “Help the United States become the leader in college graduates worldwide.”

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