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Will the student aid bill help with your college costs?

Congress is expected to vote this weekend not just on healthcare, but also on a student aid bill. Here’s a rundown of five key components in the legislation.

Congress is expected to vote this weekend on the student aid bill, which aims to help college students who receive financial aid.

Photo Illustration / Newscom

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As part of the historic vote anticipated this weekend, Congress won’t just be taking up healthcare reform. Another bill, which aims to help college students who receive financial aid, is also in the package.

One provision in the Student Aid and Fiscal Responsibility Act would eliminate subsidies to private lenders for offering federally guaranteed student loans. This would save the government $61 billion over 10 years, according to the Congressional Budget Office. Those savings would fund the other provisions of the bill.

Here’s a rundown of key components in the legislation:

Bigger grants. Maximum federal Pell Grants for low- and middle-income students would increase to $5,550 in 2010 and $5,975 in 2017. Also, the grants would be tied to the cost of living from 2013 to 2017 – rising at the same rate as the Consumer Price Index.

The bill would invest $36 billion in Pell Grants over the next 10 years.

The cost of college tends to go up faster than general inflation, but this provision would “help limit the erosion [of Pell Grants] in value ... and reduce the amount people will have to borrow,” says Lauren Asher, president of the Institute for College Access and Success in Berkeley, Calif.

Improved repayment options. Borrowers already can limit their monthly federal loan payments at 15 percent of their discretionary income. As of 2014, new borrowers would be able to cap their repayment at 10 percent of income.

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