Join the " Brown Bag Lunch Vigils!
Join the "Healthcare NOT Warfare" campaign!
Click here for the Congressional Schedule
After four years of hard work, graduating students walk across the stage, receive their diplomas, and embark on the next stage of their lives. After graduation, these students enter the workforce in the hopes of building a life for themselves.
However, the reality of looming student loan payments adds anxiety to their well deserved excitement. More often than not, starting salaries for recent graduates are too low and they struggle to repay loans. In order to alleviate these problems Congress has passed new laws that will make college more affordable for students and allow them to make more reasonable monthly student loan payments.
Adjustments in laws we passed over the past year will make borrowing a little better for students. The Federal Subsidized student loan rate to undergraduate students will drop on July 1st to 5.6%, so student loans disbursed between July 1st of this year and July 1st of next year will have this lower rate. The rate will continue to drop in subsequent years to 4.5% starting July 1, 2010 and finally to 3.4% beginning on July 1, 2011.
Pell Grant will increase their maximum award available by more than $600. This will aid students eligible for Pell Grants in paying the cost of college. Providing increased support in college financial aid is crucial. College costs have grown nearly 40 percent in the last five years. Recent college graduates are faced with more debt than ever before. And 200,000 students do not go to college every year because they can’t afford the cost.
Under the Income-Based Repayment program, also beginning on July 1st, borrowers will be eligible to cap their monthly payments at 15% of their discretionary income for as long as their regular payment exceeds 15% of that income. Recent graduates first entering the workforce are often faced with a steep repayment that takes effect when they are just starting out and are economically vulnerable. This important and sensible adjustment will make repayment a manageable task for new graduates. Income-Based Repayment is available for past, present and future student loans.
In addition to lower rates and greater grants, federal loans will now allow for more flexible repayment schedules for borrowers in repayment. This will aid newly graduated students who have recently entered the workforce and find that their standard repayment schedule is too steep for their starting income.
For more information, and to access an income-based repayment calculator, please go to the student aid web-site at http://www.studentaid.ed.gov. Additional information and an interactive calculator can be found at www.IBRinfo.org.
It is my hope that these changes in the law will provide deeply needed financial relief to students and families who are struggling to pay for college or to repay student loans.
PDA CPC and Other Allies News RSS Feed