"With this bill and other steps we pursued over the last year, we are finally taking meaningful reform in our higher education system."
The change eliminates banks as the middlemen. The goal is to save money so those funds can be used to help other students.
For students plotting how they will afford college in the fall, the new law will not take effect soon enough. The changes will take place in the coming years. But it's clear the cost of college is a concern for many students and their parents.
At Loyola University, 75 percent of undergraduates need some type of financial assistance. Melissa Bushmann and her mom drove up from Missouri. Melissa is considering transferring to Loyola. Along with academic considerations, there is also the money issue.
"I want her to have a good education. I want to look at good schools, but you have to look at the economics of it," said Lottie Bushmann, parent.
Ryan Brink is a sophomore at Loyola. ABC 7 found him at his work-study job on campus. He has already taken out loans to pay for school and anticipates more, as he is pre-med.
"I definitely knew I was going to have debt coming, but I felt like that was worth it ultimately, because my education is way more important than any sort of debt I would acquire," said Brink.
Changes to the college loan program aim to help students and their parents afford education.
"Michelle and I had big debts coming out of school, debts we weren't able to fully repay until a few years before I was running for office. Today we are making it easier for responsible students to pay off their loans," said President Obama.
Loans will now go through the US Department of Education. Previously. private lenders could offer the college loans with the ultimate goal to put more money into loan.
Loyola's Director of Financial Aid Eric Weems says this change will make it easier for some of their students.
"There have been many instance where students have had to seek new lenders at -- some cases -- the last minute. Now it is clear that everybody is taking loans through the US Department of Education," Weems said.
Weems estimates the average loan debt of graduates is over $18,000.
Another change to the college loan program would cap the graduate's loan repayments to 10 percent of the graduate's income.
"There are lot of professions that simply that don't have the incomes as such or just with what the economy is doing, people are finding themselves in difficulties," said Weems.
Opponents to the law say the changes will eliminate jobs for the private lenders at a time when the country is trying to create jobs. There is also criticism that the law unnecessarily takes over of the student loan industry.
These changes are a few years away and may not benefit current students. The loan caps will be available in 2014. And increases in the Pell Grant maximum come in 2013.
