[ti:New US Law Cuts Out Private Lenders for Student Loans]
[ar:Steve Ember]
[al:Education Report]
[by:www.21voa.com]
[00:00.00]This is the VOA Special English 
[00:03.30]Education Report.
[00:05.14]Today we talk more about 
[00:07.78]the costs of higher education 
[00:10.72]in the United States. 
[00:12.72]If you missed last week's report, 
[00:15.85]you can find it at 51voa.com.
[00:22.24]Foreign students who need 
[00:24.08]financial aid generally have 
[00:27.07]to seek it from the school itself 
[00:29.72]or their own government or employer.
[00:33.65]If you follow the news, 
[00:36.24]then you know that President Obama
[00:38.83]recently signed 
[00:39.98]health care reform legislation. 
[00:43.79]But one of the two bills he signed 
[00:47.07]into law also made unrelated changes 
[00:51.21]in the federal student loan program.
[00:54.89]These changes will require 
[00:57.44]new loans to come directly 
[01:00.02]from the Department of Education. 
[01:02.81]The department already makes these 
[01:05.80]federally guaranteed loans 
[01:08.53]for American citizens 
[01:10.57]and permanent legal residents.
[01:13.71]But since nineteen ninety-three 
[01:16.79]it has also paid private lenders 
[01:20.18]to provide them. 
[01:21.97]Now, as of July first, 
[01:24.91]all new loans will go through 
[01:27.74]the direct loan program only.
[01:30.58]Officials say the new law will 
[01:34.71]save the government sixty-one 
[01:37.40]billion dollars over ten years. 
[01:40.78]The plan is to use more than 
[01:44.27]half the savings to provide 
[01:46.50]more federal Pell Grants 
[01:49.49]to needy students. 
[01:51.43]A few billion will also go 
[01:54.62]to schools that traditionally 
[01:59.94]serve minorities and to help 
[02:00.68]two-year community colleges.
[02:03.02]David Baime is a senior vice 
[02:06.60]president of the American 
[02:08.29]Association of Community Colleges.
[02:11.63]DAVID BAIME: "Everybody in higher education 
[02:13.02]benefits from almost all of this bill."
[02:15.21]The new law will reduce the most 
[02:17.81]that borrowers must repay each year 
[02:21.40]from fifteen percent of their income
[02:24.48] to ten percent. 
[02:26.87]And the longest repayment period 
[02:30.21]will be shortened from twenty-five years. 
[02:33.33]Any remaining debt will be forgiven 
[02:37.16]after twenty years -- or ten 
[02:40.20]if borrowers enter public service.
[02:43.56]Supporters in higher education said 
[02:47.15]the final bill did not go far enough. 
[02:50.88]Republican opponents called it 
[02:53.97]an unnecessary government 
[02:56.11]takeover of a private industry. 
[02:59.24]Another criticism was that 
[03:02.09]the financial services industry 
[03:04.33]could lose about thirty thousand jobs.
[03:08.26]The Department of Education reported 
[03:11.79]last year that about two-thirds 
[03:15.23]of graduates from four-year colleges 
[03:18.51]had student loan debt. 
[03:20.85]The average was about 
[03:22.77]twenty-three thousand dollars.
[03:24.96]And that's the VOA Special English 
[03:28.80]Education Report, 
[03:30.89]written by Nancy Steinbach. 
[03:33.23]You can discuss education 
[03:35.52]and other subjects 
[03:37.27]on our Facebook page 
[03:39.56]at VOA Learning English. 
[03:42.50]And you can find transcripts 
[03:45.73]and podcasts at 51voa.com. 
[03:52.06]I'm Steve Ember.