The Congressional Budget Office says that the end of subsidies would result in a taxpayer savings of $87 billion, yet it continues that administrative costs and market conditions could push the actual savings to around $47 billion. The money would instead be used to increase the maximum Pell Grant from $1,400 to $6,900 over the next 10 years, making higher education more accessible to students without the financial resources to pay for college. Pell Grants will increase at a rate slightly greater than inflation, if the bill becomes law, over the next decade, rising at an annual rate of 2.6%.

Obama's plan to move Pell Grants into the hands of lawmakers entirely was not included, as it would have cost approximately $117 billion. His plan to eliminate the college aid form did not make the cut, though the House measure would shorten it.

Some of the recovered cash, however, will be used for purposes outside the realm of higher education, including the construction of schools for grades kindergarten through 12 and to develop new preschool programs.

Private lenders would still be able to participate in the student loan business, but they would have to do so without the subsidies. Last year, these lenders made $56 billion in loans to more than 6 million students. Direct loans from the government, meanwhile, accounted for $14 billion.

Many lenders worry about the loss of jobs that could follow the enactment of this measure, with more than 30,000 people working in positions they say depend on the subsidized loan program. Colleges, meanwhile, are concerned that they would not be able to implement the program in time for the start of the next school year.