On July 1, the federal Health Care and Education Reconciliation Act took effect.

As of this date several changes go into effect that will directly impact students and higher education institutions in the coming academic year and for many years to come.

• The bank-based Federal Family Education Loan Act was eliminated and replaced with the Direct Loan Program for all federal student loans.
• The maximum federal Pell Grant award for the 2010-11 academic year will increase to $5,550, an $800 increase since 2009. The increase is based on the cost savings provided by transitioning to the Direct Loan Program.
• Pell Grant award increases are now tied to the Consumper Price Index (CPI).
• Eligibility for the Income-Based Repayment Plan was expanded.
• The interest rate on new subsidized student loans fell from 5.6% to 4.5%