On Feb. 1, President Barack Obama unveiled his budget proposal for the 2010 fiscal year, which contains several programs designed to help college students.
"This [budget] will help us reach the goal I've set for America," Obama said. "By 2020 we will once again have the highest proportion of college graduates in the world." The budget expands on many of the ideas he expressed in his Jan. 27 State of the Union address.
The $3.83 trillion plan includes a 6 percent increase for federal education spending, with $3 billion in extra funding for elementary and secondary schools. Additionally, a large portion of the proposed education funding will go toward the Pell Grant program, which provides assistance to low-income students to the tune of $17 billion.
The increase in Pell Grant support intends to partially offset the rising costs of college tuition and the effects of inflation on higher education costs. The proposal will also make yearly increases for Pell Grants permanent, as well as make them a mandatory entitlement program of the government.
In addition, much of the federal financial aid program would be overhauled including a simplification of the financial aid application process. The plan attempts to remove the "middleman" of the financial aid program by having the government grant financial aid directly rather than through subsidized banks and lenders.
Finally, Obama's budget would rework income-based repayment plans for indebted college students so that graduates will not be expected to pay more than 10 percent of their annual income toward student loans. Any lingering debt would be totally forgiven after 20 years, precluding the possibility that students could end up paying off their loans until retirement.
"America's economic security depends on improving education," Secretary of Education Arne Duncan said in an outline of the proposal. "We have to educate our way to a better economy."
The budget also includes $10.6 billion to improve and modernize community colleges and $3.5 billion for the College Access and Completion Fund, a program designed to help students who face financial obstacles to obtaining a college degree.
"The budget sends a very clear signal to the country that this president is serious about education," Duncan said. Both houses of Congress must approve Obama's budget in order for it to pass.