Private student lenders and their congressional allies are preparing to square off with President Barack Obama over the piece of his education plan that would allow for major increases in Pell grants.
Obama’s proposal to eliminate bank subsidies in favor of direct government lending would save $94 billion over the next decade, funding that would go to increasing Pell grants, reports The New York Times.
Private lenders are lobbying hard to retain a system that has reaped huge profits with little risk. They’re supported by Democrats in districts where the loan industry is a major employer and Republicans who argue the proposal will needlessly expand government.
Obama’s plan would increase the number of students eligible for Pell grants in Ohio from 198,043 this year to 208,036 in 2010 while boosting the average grant by $188, The Post reported in March.
As of February, 7,121 OU students were receiving Pell grants, totaling an estimated $24 million aid.
-Chris Kardish
