President Obama passed the publicized health care reform bill at the end of March, but one of the lesser-known additions to the bill is a reform to college student loans, which will take effect July 1, 2010.Several University students take out loans despite TOPS and other LSU scholarships.”This semester was my first to take out a student loan, and I took out $5,500,” said Samantha Barnes, sociology senior.Barnes said she took out the loan to help with the cost of tuition, rent and everyday expenses.The process of applying for a loan currently allows a student to choose which bank to go through.Barnes said she also plans on taking out loans to pay for two years of graduate school.In the past, private banks have handled the loans college students take out for their tuition. The new reform would move loans to federal jurisdiction.The current system allows private banks to lend money to college students while the government guarantees the loans.Private banks started receiving money from the federal government to keep rates low and to provide loans to students for tuition and fees when the Federal Family Education Loan Program passed in 1965.Officials predict the government will save $61 billion during the next 10 years.With the additional savings, the government plans to increase the amount of money spent on Pell Grants, which provide money for lower-income college students based on need.The American Recovery and Reinvestment Act, which passed in February 2009, increased the maximum amount for a Pell Grant by $500 for more than 7 million students.The savings will also use about $19 billion to offset the costs of the new health care system.The cost of college is rising despite the country’s economic downturn. Students can expect to pay $172 to $1,096 more in tuition and fees for the 2009-2010 year than for the 2008-2009 year, according to CollegeBoard online.College tuition for the 2008-2009 school year cost more than $43,000 a year, according to Campus Grotto online. Total costs of enrollment can run up to $53,000.Many private banks and other financial institutions will lose a significant amount of business. Among these are Citigroup, Bank of America, Wells Fargo, Sallie Mae and JP Morgan.Lisa Westermann, Wells Fargo spokesperson, said the company does not expect the new bill to impact them significantly.”We’ve been expecting this for several years, so we have been moving our business more toward private student loans,” Westermann said.Students apply for private loans after they receive grants and loans from the government, Westermann said. These loans help offset leftover costs.”It is too early to speculate” if Wells Fargo will have to lay off employees, Westermann said. The company recently bought up Wachovia and will be able to offer student loans out of those additional locations as well.Another company that will lose business from students is Sallie Mae, which specializes in private student loans. The legislation will prevent it from originating student loans.”The final legislation passed by Congress will force Sallie Mae to reduce its work force by 2,500 from today’s 8,600,” said Rick Castellano, director of public affairs at Sallie Mae. “These are painful decisions, and they are in the process of being finalized.”Mark Rodgers, Citigroup director of public affairs, said his company also advocated maintaining competition in student lending. 
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