The House of Representatives passed the Healthcare and Education Affordability Reconciliation Act last Thursday, overhauling student lending and raising funding for higher education. President Obama will sign it into law tomorrow.

The bill’s Student Aid and Fiscal Responsibility Act will eliminate taxpayer subsidies to banks and use those funds to bolster federal student loan and grant programs. The legislation will devote $36 billion to the Pell Grant program, raising the maximum award to $5,550 in the next school year and a projected $5,975 by 2017.

Jake Stillwell, communications director for the U.S. Students Association, said that by directing over $60 billion of savings into financial aid programs, the bill will increase millions of low-income students’ access to higher education.

“The Pell Grant will receive over $30 billion in funding that will keep it tied to the rate of inflation, ensuring it keeps up with the cost of living,” Stillwell said. “Additionally, community colleges and minority serving institutions will receive several billion dollars in critical investments.”

The legislation eliminates the Family Federal Education Loan program — known as Stafford loans — which will save about $61 billion over 10 years. With this cut, the bill removes private lenders as middleman and places the government in control of federal student loans.

Brendan Daly, communications director for House of Representatives Speaker Nancy Pelosi, said with the new bill, federal loans will have lower interest rates than ones from private banks and lending corporations such as Citibank and Sallie Mae.

“It’s quite a remarkable thing,” Daly said. “It’s a direct way of dealing with the government rather than having to go through a bank. The idea is that you can get more of a loan at a better interest rate, which should help more people be able to attend college.”

The legislation will also make student loans more manageable by strengthening the Income-Based Repayment Program, which allows graduates to pay off their loans at a rate proportional to their income. According to a press release, graduates with low salaries who have federal loans to pay off will be offered a payment plan that is 10 percent of their monthly salary at most. They can also potentially have their loan completely forgiven after 20 years.

U.S. Representative George Miller, D-Calif., co-author of the legislation and chairman of the House of Education and Labor Committee, said in a press release that the bill is beneficial for students, taxpayers and the job market in general.

“Today, Congress voted to stop wasting billions of taxpayer dollars to subsidize big banks and start investing that money directly in our students and families,” Miller said in a press release. “With this one move, we will help students pay for college, prepare them for our global economy, keep jobs in America and reduce the deficit.”

Furthermore, Adam Walker, a first-year political science major, said this legislation is steering the country in a productive direction.

“I feel a lot better about having a student loan,” Walker said. “Now, I’ll actually be able to pay it off. Also, I think this whole program makes a lot of sense. It encourages higher education and it shows that the government is finally making it a major priority.”

The bill, H.R. 4872, was approved by the House last week before being sent to the U.S. Senate, which passed it with a few minor amendments. The modified bill was then sent back to the House, where it passed with a 220-207 vote.