STUDENT LOAN CUTS!
If you have been taking out federal loans to help finance your more than $40,000 education at Case, you better take note!
Yesterday, the House of Representatives passed a budget-cutting bill, the Deficit Reduction Act, that would cut away $12.7 BILLION from the federal student-loan financing, the biggest decrease in the program's history. The result will be higher interest rates, cuts in federal subsidies to private lenders and mandatory borrower's fees.
The cuts are part of a larger $40 billion package of revenue-saving benefit reductions, including cuts to Medicare and Medicaid. The legislation passed mostly on a party-line vote, 216-214. It now heads to the Senate where it will meet opposition, enough to warrant Vice President Cheney to come back to Washington in case there is a tie. So far five Republican senators have indicated that they will oppose the legislation. Note that the student loan cuts make up 30 percent of the deficit reduction in the bill, but less than half of 1 percent of annual federal spending.
Perhaps politicians think that students won't make a fuss. Perhaps they would not have to worry because registered voting students do not vote in large numbers, and their turnout is low during an off-year election. It seems that in order for politicians to reduce the federal deficit, student programs are the best target. Yes, they are cutting Medicare and Medicaid by 0.4 and 0.3 percent over five years, but at least they are not cutting Social Security. The AARP was still upset, but then the impact for them is smaller than for the students.
So what's the result if the Senate passes it and Bush signs it? The Pell Grant will remain fixed at $4,050 for the fourth year in a row. The rate on Stafford loans will increase to a fixed rate of 6.8% starting on July 1. Currently, it is at a variable 4.7%. PLUS loans will go up to a fixed interest rate of 8.5 percent from 7.9 percent. Annual loan limits will go up, but who wants to take out more loans? Stafford loan limits will rise from $2,625 to $3,500 for freshmen and $3,500 to $4,500 for sophomores. Unsubsidized Stafford loans for graduate and professional students will increase from $10,000 to $20,000 a year.
The elimination of the origination fee over 5 years in favor of a mandatory insurance fee of one percent, which lenders pay to cover the loans against default sounds more of a gimmick solution for lenders.
But for consolidation rules that will take effect on July 1 if the legislation is signed into law, note this. You cannot consolidate with your spouse's, you cannot consolidate your loans while in school, and makes it more difficult for the student to re-consolidate.
I urge all students and graduates to consolidate now since you can get a consolidation loan as low as 2.75 percent with benefits applied. You can get a longer payment term, one monthly payment, and no prepayment penalties.
Yahoo Finance - Student Loan Consolidation Rates to Increase; Budget Reconciliation Passes
Kansas City Star - Students await vote on loan program
The Cavalier Daily - The student loan shakedown
Oklahoma Daily - Bill would increase student loan rates
Watts should check his info before saying the wrong thing
Media Matters - CNN's Watts falsely accused Gov. Kaine of misrepresenting student loan, Medicaid cuts
Update:
Thanks to Mr. President Bush, he has signed the bill cutting the student loan program. So mark your calendars and consolidate at the lowest federal interest rate before July 1.
CNN.com - Bush: Budget will spur growth, rein in spending
Comments
Posted by: Brian Gray
Posted on: February 2, 2006 01:32 PM
You cannot consolidate with your spouse's.I was told to never consolidate my loans with my wife's loans. If spouses consolidate loans, both people are equally responsible in case of a divorce, and in-school deferments are no longer available (unless both people are in school). Plus, if someone dies, their loan is waived, but consolidation with a spouse may complicate matters. Even though the government says that part of the debt can be removed, do we all have 100% confidence in the system?
Posted by: Eldan Goldenberg
Posted on: February 9, 2006 01:02 AM
Perhaps politicians think that students won't make a fuss. Perhaps they would not have to worry because registered voting students do not vote in large numbers, and their turnout is low during an off-year election. It seems that in order for politicians to reduce the federal deficit, student programs are the best target.
My experience (from being a student in Britain over the period when tuition fees were introduced) suggests that you're exactly right. There's a tendency for all concerned to see this more as an issue about the welfare of students (who, let's face it, are a pretty privileged group), and not as an issue about opportunities for the poor to get an education, so two things happen.
(1) students don't do very much about it, because they're already in the system, and it's a much bigger issue for future students.
(2) other people tend not to care, because students are widely perceived to be lazy excessive drinkers who already get an easy ride by not having to hold down a "real job" for a few years.
So yeah, I think Bush has realised what Blair realised a decade ago: that student funding is a soft target when something needs to be cut from the budget.
Posted by: Keith Jones
Posted on: April 30, 2007 03:27 AM
As of now the Stafford loan is available at an Interest rate of 6.8% approximately, and the payments are anyways deferred till somebody graduates, though the good thing is the .375% interest rate that is wavered if a student applies for auto-debit payments.
Anyways, there are a number of ways for someone to get student consolidation loans, the only question is how hard you look to find it.
Posted by: Wistuo Finance
Posted on: September 17, 2007 01:09 AM
Source: http://wistuo.blogspot.com/2007/09/wistuo-best-student-loan-consolidation.html
Best student loan consolidation, a way to slim down your monthly burden
Going to college is very important. Thus, Americans, even married once still continue to go to college. This is because you have better future if you are able to finish college; this is true in American and even in the other parts of the world.
To help you with this important factor in your life, student loans are available to help you go through college education. However, students end up with knee-deep in student loans.
If you are one of these students, you need not despair; you may shop around to find the best student loan consolidation entities to help you in the process of getting out of debt.
Best student loan consolidation will help reduce your monthly payment of up to 50%.
You cannot find any better deal than that. Reducing your monthly payment will mean that you can have some spare money for other purposes. Best student loan consolidation will thus help you have some money to meet other expenses like car payments, household needs, and childcare.
Additionally, because of the best student loan consolidation program, your credit rating will improve and you can even extend your paying period from the usual ten years to as long as thirty years.
You may also find the best student loan consolidation company that will give an additional percentage of interest on top of the savings from the consolidation. This will be good to lessen your monthly burden.
Additionally, if your student loan is under the federal direct student loans, you may qualify for the best federal direct loan consolidation program.
In this program, in addition to the 50% or more reduction in your monthly payments, there is a lock in lower interest rate available for you.
This lock in lower interest rate is best for your student loan consolidation program because it will shield you against inflation rates.
This will mean that you will not have to worry about additional charges due to the inflation rate fluctuations.
To top is all off, the best student loan consolidation deal under the federal direct program is easy to apply, and there are no fees, credit checks, application, or original charges.
Thus, it is a clean way through paying your student loans and can even spare you some money for other purposes. Is this not the best student loan consolidation program you will ever find?
If you are not sure if your student loans are under the federal direct student loans program, you may check out the Internet. Match your student loans if they will qualify for the best student loan consolidation program.
You can also find in the Internet additional information that you can use to help you get out of that knee-deep debt.
Posted by: Student loan Consolidation Programs
Posted on: November 8, 2007 07:51 AM
Find all info that you need about student loan consolidation program.
Posted by: Chad Brochill
Posted on: July 29, 2008 11:35 AM
For a comprehensive overview of what is now the current law in regards to the aforementioned school loan cost cuts, visit http://www.schoolloans.com/
Posted by: federal plus loan
Posted on: August 3, 2008 03:36 PM
While most college students were on winter breaks, the US Senate was debating over a bill which included massive student loan cuts. On December 21, 2005 in a 51-50 vote the US Senate passed a bill which included $12 billion in student loan cuts from the federal budget. Vice President Cheney cast the tie-breaking vote, while five Republicans sided with the Democrats who unanimously opposed the bill.
A second blow was wielded this week when the House passed a bill also in favor of the student loan cuts. While 13 moderate Republicans joined House Democrats in a no vote, not enough opposition was gained and the bill passed 216 to 214.
The drastic measure eliminates $2.2 billion in critical funds used to administer the federal student loan programs. Additional changes included a new 1% insurance fee that student borrowers must pay to guarantee agencies and raising the interest rate cap for parents who take out federal education loans for their children from 7.9 percent to 8.5 percent.
The bill outlines a total of $39 billion in budget cuts which besides the student loan cuts, severely reduces Medicaid and Medicare programs for low income and senior Americans. The measure is expected to be signed by President Bush next week.
This measure flies in the face of President Bush’s comments in the State of the Union Address on February 1st where he emphasized the importance of education.
Posted by: federal plus loan
Posted on: August 4, 2008 02:36 AM
Most of the students to sustain their expenses on education opt for student loans. But sometimes to obtain the loans instantly, most of the applicants to raise the necessary finances sign away particular deals without going through the terms and conditions. The loans availed may be charged with a comparatively high rate of interest and now putting a lot of pressure on the student. Just in case, if you are having the same trouble, then consider opting for Refinance Student Loans. These loans are tailor made to help you reduce the burden of debts.
Posted by: kimmy
Posted on: August 8, 2008 12:39 AM
KNOW YOUR LOANS: FEDERAL VS. PRIVATE
Though federal and private loans are both eligible for consolidation, federal loans have superior rates and terms, which are set by the government. However, federal and private loans must be consolidated separately.
Federal Loans Have Favorable Terms
There are several types of federal loans that can be consolidated. These include:
* Stafford loan
* Perkins
* Parent PLUS
* Supplemental Loans for Students (SLSs)
* Health Professions Student Loans (HPSLs)
* Loans for Disadvantaged Students (LDSs)
* Nursing Student Loans (NSLs)
* Health Education Assistance Loans (HEALs)
Different loans carry different interest rates. Some are fixed, some are variable. While it's possible to consolidate fixed--and variable-rate loans, the primary advantage of consolidation is shifting your variable-rate loans to a fixed rate.
Student Loan Consolidation Rebate
Posted by: shahadin
Posted on: August 22, 2008 10:12 AM
Loan Consolidation is a great option when one wants to increase ones monthly cashflows. Loan Consolidation merges all your loans into single loan policy thus increases the duration of the loan which as a result reduce monthly payments. Loan consolidation breaks into two types private loan consolidation one dealing with your private loans and federal loan consolidation which deals with your federal loans.
Posted by: Consolidate Student Loans
Posted on: September 10, 2008 05:21 PM
Unfortunately, things have deteriorated even further in the Student Loan market with the credit crisis.
You can just about forget consolidating a Private Student Loan that is advantageous to the borrower at the prevailing rates and the Federal money is tight as well.
Until the general housing credit crisis ends, lenders are too risk averse to take chances on borrowers with little credit or income. (i.e. students)
Posted by: Signature Loan
Posted on: September 21, 2008 12:34 AM
In today's financial climate, with more and more institutions becoming insolvent, students will need to look for funding in the private sector including student signature loans.
Posted by: education consolidation loan
Posted on: November 24, 2008 02:49 PM
With the ever shrinking sources of student aid more students will need to have student loans.
Posted by: Loan Modification
Posted on: January 28, 2009 10:04 PM
College is becoming increasingly difficult to afford.
Borrowing money for college is a big responsibility but college remains a smart investment for obtaining a satisfying career that earns a competitive salary.