The Health Care Reform legislation included a section which changes the way student loans are financed. Currently, loans are written by commercial banks and other institutions, secured by government gaurntees with extra fees being paid by the government to the banks for administration.
After the new law takes effect the government would expand an existing direct lending program, a step that the Congressional Budget Office said would save taxpayers $61 billion over 10 years, and use the money to increase Pell grants for needy students.
The $480 million for Kentucky represents additional Pell funding. The state will also recieve $9.4 million for historically black and minority-serving colleges over the next decade.
