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College students had reason to celebrate last week after President Obama signed into law long-awaited reforms affecting federally guaranteed student loans, despite intense lobbying by banks and lenders to scuttle it. No longer will the government pay fees to financial institutions acting as intermediaries to broker the loans. Lenders profited from the interest, but taxpayers took the loss if a student defaulted. Many colleges and universities opted for direct loans to bypass the system.

Starting July 1, students will borrow directly from the U.S. Department of Education, which will select private companies to service the loans through a competitive process. Critics who cry “government takeover,” miss the small detail that it’s a government program from the get-go.

Best of all, the direct loan system saves $68 billion, money that will now provide more Pell grants, and aid community colleges and historically black colleges.

The maximum Pell grant will rise from $5,550 to $5,975 by 2017, and 820,000 more grants will be made by 2020. Students will be able to cap loan repayments at 10 percent of their income, instead of 15 percent. Loan balances will be forgiven after 20 years, instead of 25 years, if they keep up payments. And those who pursue public service careers — such as teaching, nursing, the military — will have loans forgiven after 10 years.

The one disappointment in the bill: the downsizing of Obama’s $12 billion vision for expanding community colleges, which became $2 billion, mostly to claim more savings for health care reform. Historically black colleges will receive $2.5 million.

Community college funds will support career training programs for workers displaced by shifts in their industries. Lawrence Nespoli, president of the New Jersey Council on County Colleges, representing 19 community colleges, noted that $2 billion is nothing to sneeze at, and that some 50,000 community college students receive Pell grants.

“Progress comes incrementally,” he said. “This is way more half-full than half-empty.”

For all students, it’s a breakthrough in their effort to hold the line on education costs.