Will the changes affect you?
Not if you already graduated.... As of July 1st of 2010 all student loans will be made through the Direct Student Loan program. The Direct Loan program will offer the same Stafford (subsidized and unsubsidized), PLUS (loans in the name of the student's parent) and consolidation loans.
According to fastweb.com, the Direct PLUS loan will have a lower interest rate , 7.9% instead of 8.5%, and the approval rate is much higher in the Direct Loan program.
The legislation also implements President Obama's FY 2011 plan for improving income-based repayment plan and loan forgiveness will be accelerated from 25 to 20 years. Unfortunately, this is not retroactive and current borrowers will benefit. The implementation will begin for new borrowers of loans on or after July 1, 2014. These borrowers will be able cap their student loan repayment at 10% of their discretionary income.
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