New Health Care Law Affects Insurance and Student Loans


The second portion of the health care bill, which became law on March 30, will affect health insurance as well as student loans. (Official White House Photo by Chuck Kennedy)

Published: April 1, 2010

When faculty members opened their email, on March 29 , they found a message from Financial Aid:  “When you meet with students please remind them that the new financial aid legislation Congress passed on March 24 requires that every Stafford Loan borrower complete a new Master Promissory Note in order to receive their loan funds.”

“Seventy-five percent of all Fordham undergraduates use this loan program,” the letter said, concluding, “If [students] do not act,” by downloading the form at, and following its instructions, “they cannot receive the loan funds they expect.  It is a new requirement established by the Department of Education as part of the move to Direct Lending and most students are unaware that it affects them directly.”

The Higher Education Bill, like the health care bill it was tucked into, will both have three major effects on Fordham students in regard to financial aid and health care.

The higher education bill provides for government loans rather than banks as lenders, with a lowered interest rate and a total increase to the Pell Grant of $36 billion. Debt repayment rates will be limited to 10 percent of one’s discretionary annual income, down from 15 percent. All remaining debt will be forgiven after twenty years, down from 25, and for those who go into public service, all debt will be forgiven after 10 years.

The student loan changes go into effect for loans filed on July 1 or after of this year. While some students understand the big picture, they do not yet know how either the changes to higher education funding or health care will affect them.

Dave de la Fuente, Fordham College at Lincoln Center (FCLC) ’10, accumulated a “significant” amount of loans while attending Fordham University. He plans to attend Boston College to study for a Masters of theological studies, and he does not yet know how he will pay.

“I hope to avoid student loans in graduate school, but it’s a possibility,” de la Fuente said. “The reality is that so many people need student loans to pursue their academic dreams. I think it’s good to know that if it’s difficult to afford going to the college of your choice, the system won’t completely rob you of your money.”

Students also need to prepare for the health care changes that will impact college students in roughly six months. Currently, the states determine the age to which individuals are allowed to remain on their parents’ coverage. Under the new law, dependents can keep their insurance until they are 26 years old. However, since this provision does not go into effect until January, students cannot assume that they will automatically continue on their parents’ plan.

Many insurance companies currently suspend coverage once a dependent no longer classifies as a full time student. According to the Kaiser Foundation, individuals in New York State may stay on their parents’ insurance until they are 29 years old. However, they must be unmarried, not eligible for insurance under an employer and they must live in New York. However, in several other states, coverage ends when the dependent turns 19 years old. Fourteen states, including Virginia, Florida, Pennsylvania and Colorado, filed lawsuits against the new health care law. The suits claim that the new law is unconstitutional, since it demands that citizens have an insurance plan, or they will be fined. The 10th amendment declares that the national government is restricted to the rights specifically set out in the constitution. Health care is not one of those rights.

However, students must plan for their futures, whatever the outcome of possible litigation.

Elissa Dauria, FCLC ’10, is not sure how she will be covered once she graduates in May. “I’m [covered by] my stepdad’s insurance now, and I’m pretty sure it ends once I’m no longer a full-time student,” she said. “I believe that [we] can pay an extra amount monthly,” called the COBRA plan, “to extend it.”

“Ideally, I will have a job that has full benefits shortly after graduation, but that can’t be guaranteed. If I still don’t have a job with benefits when the age extension kicks in, I’ll be back on my parents’ coverage,” Dauria said.  ”Going insurance-less is not an option for me. I have five regular prescriptions, and no adult woman should ever be uninsured, even for just half a year. I think this new bill is a literal lifesaver for a lot of people. ”

Ian Christie, FCLC ’10, lost coverage on his parents’ insurance when he turned 22. “I’ll get it back as soon as this portion of the law goes into effect. Needless to say, I’m thrilled,” Christie said. “I was dropped unexpectedly and haven’t been to a doctor—despite needing to go on several occasions—for some time.”

de la Fuente recently spoke to his father about whether he will be covered on his insurance after graduation. “He said I could find a job, or go to graduate school, because his health care wouldn’t continue to cover me,” de la Fuente said, who decided to attend graduate school, which will ensure coverage for at least another two years. “I’m a big proponent of universal health care… it’s not just every American for themselves, it’s about caring for the collective.”

Kathleen Malara, the director of health services at Fordham, encourages students to look into their health care options. “Most people don’t people don’t think about [insurance] until they need to,” she said.

Gregory Pappas, assistant vice president of student affairs and dean of student services at the Fordham College of Rose Hill (FCRH), is available to help graduating students extend their health care coverage through plans contracted through Fordham.

Students should also contact the financial aid office if they have questions about their student loans.

*Jenni Hashimoto, FCLC ’11, Juliet Ben-Ami, FCLC ’11, and Kyle Morrison, FCLC ’12, contributed to this report.