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July 02, 2010 4:33 PM
Student Loan Changes
The terms for student loans just got a little better. According to an article by Kim Clark in the Chicago Tribune:
Now that the hype surrounding the government’s overhaul of the scandal-tinged federal student loan program has settled, students and parents seeking loans for the 2010-11 academic year are getting some good news: Many federal education loans will be cheaper, easier to get and easier to repay than they’ve been in recent years.
Yesterday the federal government reduced the interest rates on many education loans and now, of course, loans are made directly from the government to students, without the intermediary of a bank.
The House Committee on Education and Labor produced this video explaining the new rules. It’s admittedly an incredibly partisan (“The Democratic congress has made college more affordable!”) production, but it gives a good rundown of what’s changed financially:
As the video says, “now we can afford to be excited” about getting into college.
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Craigie on July 11, 2010 11:29 AM:
The variable interest rates of Stafford loans issued prior to 2007 declined from 2.48% to 2.47% on July 1 for borrowers in repayment (and from 1.88% to 1.87% for in-school, in-grace and deferred borrowers); these are still record-low interest rates. Why not consider consolidating? The rates are unlikely to go any lower.
For many borrowers, this is a strong, additional benefit to consider student loan consolidation, above and beyond the traditional benefit of getting all one's loans in one place, with one single monthly bill: the opportunity for student and parent borrowers with variable interest rate federal student loans to "lock in" a permanent fixed-interest rate at today's 55-year-low interest rate levels. http://www.loanconsolidation.ed.gov