Federally guaranteed student loans were changed substantially with the signing of the two health care bills by President Obama this week. Now why student loan bills were in the health care legislation, only those involved can say.
That is way above my pay grade. And for me to understand it, it would have to make common sense-also unheard of in Washington lately-regardless of your political affiliation.
The Wall Street Journal had this article about the school loans and the Health care law today.
Student Loan Changes in the New Health Care Bill:
- The money for guaranteed school loans will, as of this fall, be from the Federal Department of Education-no more shopping around at different banks.
- The maximum amount of repayment/year will gradually decrease from 15 % of income to 10%,over the next 4 years. (Already true for nurses working for non-profit hospitals and clinics.)
- The amount of money available for Pell Grants-(which don’t have to be repaid) will go up-although applications are up 20% this year due to the economy. So apply quickly if you or your parents income levels qualify -(usually less than $50k/yr-but is based on family size.)
- Provisions for debt management education, for low income recipients, was made to the tune of $750 million……
- Private loans may still be available between you and your bank-but they will not be guaranteed by the feds.-so good credit will be required-especially in this economic environment.
- A decrease in annual interest rate of 7.9% under the direct program, compared with 8.5% under the old program.
Student Loan recommendations from me:
- Try to get by without borrowing money-see previous posts about this here.
- If you do borrow money, limit your total borrowing to less than your first years expected salary-to make sure you can pay it back in a reasonable amount of time. (Before retirement would be good.)
- See if you qualify for student loan repayment programs, for nurses by the NELRP.
If you have questions or comments, let me hear from you. Hit the comment button….
Tags: income based student loan repayment, new student loan changes, student loans, student loans and the healthcare bill
Hi Dr. Dean,
Another important change to student loans is that there will be forgiveness of the loans after 10 years (as long as they are in good standing) for students choosing the public service sector such as nursing. This is fantastic for future nurses!
Stephen
That is right Steven, thanks. I had that fact in the post I linked to that I did some time ago, about student loan forgiveness programs for nurses.
It is a great stress reliever, to know there will be an end to those payments, someday……
Thanks for visiting.
[...] Millionaire Nurse Blog presents Student Loans & Obama Health Care Reform-What’s up with that??? saying “An update on the recent changes in the federal student loan program. Contained in the [...]
Where do I find more information regarding the fact that there will be loan forgiveness after 10 faithful years of payment?
Aimee, check out this review of the eligibility requirements at FINAID-http://www.finaid.org/loans/publicservice.phtml.
You apparently need to do a Federal Loan consolidation, then apply for the forgiveness program.
Let me know how it works out and how the process works-so we can help other readers.
Good Luck, hope you are eligible.
Federal loan consolidation can be an excellent way to save money on loan repayment. Of course, always check out the reliability of the consolidator before signing on the dotted line.