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Why paying for your kid's college education might get easier

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The Obama administration has proposed drastic changes to the way American children may pay for college education. From 2000 to 2005, college tuition at public universities increased 40%, but the Pell Grant remained locked at just above $4,000 from 2003 until 2007. Even now, the amount of money students and families are able to borrow from the federal government without private loan assistance is unlikely to meet the financial cost at many public universities.

Now leaders in Washington hope that by October, the U.S. Department of Education will play a larger role in financing student educations, especially for students who need the help the most: low-income students for whom a college or vocational degree can increase their standard of living significantly. The Obama administration hopes to increase the amount of Perkins loans distributed to students to 6 times its current rate.

Advocates of the program say that it will benefit Americans protecting borrowers from private industry rates and policies, and that capturing the money to be made from running a larger student loan program will help fund the increase in the Pell Grant.