Student Loan Reform 101

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Monika Bauerlein,
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Also read: The rest of the 2010 MoJo Mini College Guide, plus the 2009 MoJo Mini College Guide.

Congress reformed more than just health care this year. Below, four ways the Student Aid and Fiscal Responsibility Act affects you:

Your federal Stafford Loan will now be made directly by the Department of Education, saving the government tens of billions it used to pay in administrative fees to companies like Sallie Mae.

If your parents’ combined income is less than $50,000, you qualify for a Pell Grant (PDF), and your yearly scholarship will increase by as much as $425.

Community colleges and historically black- and minority-serving schools will get grants totaling $4.5 billion to use at their discretion.

Once you finish school, your loan payments can be no more than 15 percent of your monthly salary. Students borrowing after 2014 will have to set aside only 10 percent of their paycheck for loans.