President’s Budget Would End Bank-Based Student Lending and Significantly Expand Pell Grants

To the dismay of lenders and the delight of students, President Obama on Thursday unveiled a budget blueprint that would abolish the bank-based student-loan program and use the savings to raise the maximum Pell Grant and make it an entitlement.

The preliminary budget for the 2010 fiscal year, which administration officials say they will flesh out in April, would also provide a $5-billion increase for Perkins Loans, making an estimated 2.7 million more students eligible for the