Health Bill Is Rx for Student Loans, Too

(CBS) Part of the Democratic health care reform was sent back to the House of Representatives Thursday because of two minor changes to a section of the bill that has nothing to do with health care.

In fact, until now, many people didn't know that tucked into the health care bill are some of the most sweeping changes in decades in a different area - helping students pay for college.

CBS News correspondent Ben Tracy reports Colin and Corey Fequa are caught in the middle of the fight raging in Congress. They had to drop out of Delaware State after racking up a combined $55,000 in debt for tuition, room and board, and books - in just two years.

"You need some type of degree to go far and get some type of career," Corey Fequa said.

For their single mom, Karen, the college costs were crushing.

"I try to be a good mother," she said. "I felt I failed as a mother."

But now they may get help from the health care bill. The new law includes $36 billion for Pell Grants, free government funds given to 6 million low-income students. The maximum Pell Grant would jump from $5,300 this year to nearly $6,000 by 2017. Without the new law, it would have dropped to $2,150 next year.

"It adds up to $1,600 over four years," said Lauren Asher, president of the Project for Student Debt. "That's a lot of money that people won't have to borrow and will help them pay for college."

SCOTUS Confirms Chapter 13 Can Include Student Loan

On March 23, 2010, the U.S. Supreme Court issued a 9 – 0 opinion in United Student Aid Funds, v. Espinosa (08-1134) in which the Court affirmed the 9th Circuit’s holding that a chapter 13 debtor can obtain a discharge of a student loan by including it in a chapter 13 plan, if the creditor fails to object after notice and opportunity to do so, and the BK court enters an order confirming the chapter 13 plan. In bankruptcy, a student loan is not discharged unless the bankruptcy court makes a determination that excepting the student loan would be an undue hardship on the debtor. Under Bankruptcy Rules, the court is required to make such a determination in an adversary proceeding — a lawsuit within the bankruptcy case. In Espinosa, the debtor did not bring an adversary proceeding. Rather, the debtor put in his plan that only the principal amount of the loan would be paid through the plan, but that accrued interest would be discharged. The student loan lender did receive a copy of the plan, and even filed a Proof of Claim. But, the lender did not object to confirmation.

Please see full article below for more information.

Schools aim for consensus on future of student aid programs

In order to settle the current battle regarding the distribution of scholarship money in the Access Missouri program, officials from 10 universities have gathered to try to reach a consensus on the issue.

“The public universities decided that the current distribution of scholarship money is unfair to their students involved in the program,” said Rose Windmiller, director of state relations and local government affairs and Washington University’s representative in the 10-person group.

Currently, the scholarship awards a maximum of $1,000 and a minimum of $300 to students enrolled in two-year Missouri public schools. It is giving a maximum of $2,150 and a minimum of $1,000 to students at four-year Missouri public schools and Linn State Technical College. Additionally, students enrolling at Missouri private schools can obtain a maximum of $4,600 and a minimum of $2,000.