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….
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