July 1 2006 Is D Day For Federal Student Loans

July 1 2006 Is D Day For Federal Student Loans



July 1,​ 2018 is​ D-day for Federal Student Loans
Mark the​ date – if​ you​ have student loans or​ plan to​ take out student loans,​ major changes are in​ the​ works that will impact you​ on​ July 1,​ 2018 .​
Every July 1st,​ the​ Federal Government resets the​ interest rates on​ Federal student loans,​ but this year is​ different .​
Not only will the​ rates on​ popular Stafford student loans increase from the​ current variable rate of​ 4.7% to​ a​ fixed 6.8% rate,​ but the​ government has enacted a​ handful of​ other laws that mean big changes for future and current students as​ well as​ students who have yet to​ consolidate their loans.
Which student loans are affected?
The student loans that will be affected are those that are part of​ the​ Federal
Student Loan program such as​ the​ Stafford Loan,​ the​ PLUS (Parent Loan for
Undergraduate Students) loan,​ the​ Consolidation Loan,​ and the​ Perkins Loan .​
Each loan type has a​ cap on​ the​ rate of​ interest that can be charged .​
While not at​ their federally enforced cap,​ interest rates on​ student loans will hover dangerously close after July 1st,​ 2018 .​
PLUS loan rates will jump from a​ variable 6.1% interest rate to​ a​ much less attractive fixed rate of​ 8.5%,​ just half a​ point below the​ interest rate cap of​ 9% .​

Why are student loan rates increasing?
The rate increase for student loans is​ part of​ the​ Senate's $40 billion deficit reduction plan .​
the​ largest single spending cut comes from; you​ guessed it,​ federal student loans .​
With nearly 11 million students expected to​ take out $108 billion in​ federal student loans in​ the​ 2018-2018 school year,​ the​ impact has a​ dramatic effect on​ the​ nation’s budget .​

How will higher federal student loan interest rates impact me?
These changes won’t limit the​ number of​ loans that will be available .​
Instead,​ those who do secure student loans to​ pay for education will pay back more money in​ interest over the​ lifetime of​ their loan .​
Most students use federal loans to​ finance their education .​
the​ rate hikes come at​ a​ time when students and parents are already struggling to​ adjust to​ the​ drastic increases in​ tuition and fees over the​ past ten years .​
How can I​ minimize the​ financial impact of​ these changes?
If you're out of​ school,​ consolidating your loans now will allow you​ to​ lock in​ the​ pre July 1st interest rates .​
Those in​ school or​ in​ their post-graduation grace period can still take advantage of​ loan consolidation before the​ in​ school consolidation opportunity is​ eliminated by the​ new Senate bill .​
Current and prospective students should be conscious of​ borrowing only what is​ needed to​ pay for school .​

Now is​ the​ time to​ consolidate student loans
If you​ have not consolidated your loans,​ now is​ the​ time to​ do it .​
By refinancing before July 1st,​ 2018 you​ can lock in​ your repayment rates at​ historically low amounts while enjoying all of​ the​ other benefits of​ refinancing such as​ a​ lower monthly bill,​ a​ single monthly payment,​ and a​ more attractive credit score as​ a​ result of​ fewer open accounts .​

Consolidation Options for Current Students
Until July 1st current students still have the​ option to​ lock in​ the​ lower interest
rates by consolidating their loans .​
After July 1st,​ in-school consolidation won't be an​ option any longer under the​ new law .​
Students opting for an​ in-school consolidation before July 1st must waive the​ 6 month grace period following graduation,​ but will be locked in​ to​ today's historically low interest rates throughout the​ lifetime of​ their loan.
What other changes are taking place?
Not all of​ the​ changes are bad,​ although they all involve higher interest payments .​
Students can now take out PLUS loans for themselves as​ another option for financing graduate school .​
Borrower fees will decrease across the​ board .​
the​ current FFELP fee is​ set to​ be completely phased out by 2010 and Direct Loan fees will incrementally reduce from the​ current 4.0% to​ 1.0% by 2010.
Where can I​ get help to​ ensure that I​ suffer the​ least amount of​ impact from these changes?
The complete impact of​ these changes can be difficult to​ understand at​ best .​
Student Loan specialist companies like ScholarPoint offer experts to​ talk with and access to​ online guidance,​ loan calculators,​ and information needed to​ potentially save thousands of​ dollars .​
Those who are in​ the​ dark about the​ changes and fail to​ consolidate will unfortunately suddenly find themselves owing much more than they originally bargained for .​
With a​ little insight and a​ few good strategic moves,​ you​ can save quite a​ bit of​ money by consolidating your student loans before July 1st 2018.




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