Obama's Student Loan Changes Draw Concern

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WASHINGTON - For the second time in a week, President Obama has signed health care legislation into law.

This version includes the so-called "fixes" added by House Democrats -- including big adjustments to the way millions of college students apply for and pay back student loans.

Obama took his pitch to a community college, Tuesday. Some are worried how the changes will effect not only students, but also jobs across the country.

The First Couple received a first class education and know first hand what it's like to be overwhelmed by tuition bills.

"Michelle and I had big debt coming out of school," Obama said.

Perhaps that's why the president is overseeing the largest rewrite of federal college aid programs in 40 years.

Starting in 2014, the federal government -- not private banks -- will become the primary lender to college students.

The president calls it cutting out the middle man. Banks no longer get fees to facilitate federal loans-- saving $68 billion.

"Those are billions of dollars that could have been spent helping more of our students attend and complete college," Obama said. "That could have been spent advancing the dreams of our children."

The average American student graduates more than $23,000 in debt. About half of college students receive federal student aid and 8.5 million of them receive Pell Grants.

"Not only are we going to offer over 800,000 additional Pell awards over the next 10 years, we're also going to raise the amount they're worth to almost $6,000 so that inflation does not erode the value of your grant," the president explained.

Still, questions remain about the changes.

Margaret Spellings served as secretary of education under President George W. Bush. She told CBN News she's skeptical of giving students less financial choice. And opponents argue pulling billions of dollars out of the banking industry will slash thousands of jobs.

"This is an industry, you know. A consumer lending product that has thrived in the private sector. It's been good for students. It's been good for job creation," Spellings said. "I wonder about the ability of the U.S. Department of Education to be the lender for literally millions of students."

President Obama is signaling more changes are on the way.

This fall, Vice President Joe Biden will host a community college summit to generate ideas to help Obama stick to his goal for America to graduate more students than any other nation by 2020.

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Jennifer Wishon

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Jennifer Wishon is the White House correspondent for CBN News based in the network’s Washington, D.C. Bureau.  Before taking over the White House beat, Jennifer covered Capitol Hill and other national news, from the economy to the 2010 oil spill in the Gulf of Mexico.  Follow Jennifer on Twitter @JenniferWishon and "like" her at Facebook.com/JennWishon.