WASHINGTON - College students seeking federal financial aid would borrow directly from the federal government and private banks could be removed from federal lending programs altogether, under legislation approved by the U.S. House.
Supporters say it would be a government investment in making higher education affordable, and it would keep interest rates low and protect students from fluctuations in the market.
Critics of the proposal say it would deny students their choice of borrowers and they say it is another example of the government overstepping its bounds.
As the plan is proposed, Pell grants, which are currently distributed to more than 7 million students, would increase to $6,900 by 2019 from $5,350 today. And the process for applying for federal aid may be simplified since the federal government would be the sole provider.
"I am pleased to support this legislation so that more students are able to receive career training and obtain college degrees," U.S. Rep. Bill Foster, a Geneva Democrat, said after voting for the proposal. It cleared the U.S. House by a vote of 253-171.
But officials from college loan offices said the legislation's impact might not be that noticeable.
"Not much will change for the way students and their parents will finance their studies," said Emily Osborn, financial aid director at Northwestern University, which has not participated in the direct loan program yet.
Osborn said most lenders in the existing federal loan programs offer the same benefits to students as the federal direct loan program. "The interest rates were fixed on both programs several years ago," she said.
And critics say it will do more harm than good.
"Thanks to another big government consolidation of power, the graduate students in our area that need assistance the most will have to struggle even more to attend school and pay their bills," said U.S. Rep. Peter Roskam, a Wheaton Republican, in explaining his opposition.
Roskam's concern is that it could end a local grant program at the Midwestern University. The health care graduate school in Downers Grove is in Roskam's suburban district.
The university offers grants to low-income students through a nonprofit foundation. Roskam and school officials say the legislation threatens Midwestern's ability to be a lender.
"The current bill would eliminate our ability to provide our students a personalized financial assistance," said Gregory Gaus, the school's senior vice-president and chief financial officer.
"We believe that the service we are providing is excellent," added Kimberly A. Brown, the school's director of financial services. "When a university can handle students' aid, why to change it?"
Supporters, however, say there may still be a role for such nonprofit organizations in the lending process to be determined by the Department of Education based on service to borrowers.
If approved by the Senate, the changes to financial aid would likely take effect for the 2010-11 academic year.
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Monday, December 28, 2009
Tuesday, December 15, 2009
Debt Consolidation Program - Unsecured Debt Consolidation Loan: An Easy Way to Get Free From Credit Card Debt
Looking to credit card debt consolidation OR a credit card consolidation expenses, countless former students have looked for various sources and means to cut down both on the number of loans being paid each month and to perhaps cut the amount paid on all of the loans to a lower single payment. In many students' cases, loan amounts today for student educational expenses can easily be beyond fifty thousand dollars. In some cases the sum may be double that amount.
The students of the 21st century are looking at very high debt amounts for their training and bankruptcy laws have gotten much tougher, not allowing students to so easily disengage from fiduciary responsibilities. There are really two types of student loans, federal and private. Each one has peculiarities and requirements that must be met in order for them to be able to have any chance to school loan consolidation.
The first are the federal student loans that are eligible for federal loan consolidation. If a student has federal Stafford loans, PLUS loans, Perkins loans, HEAL loans, Federal FFELP and Direct loans, he has lending agreements that are eligible under Department of Education guidelines to school loan consolidation expenses into one payment. When a college student first leaves school, federal student loans are due in ten years.
Monthly payments are figured on a ten year pay back schedule. With often very high balances, a payment on a single loan can be high but three or four separate accounts due each month can be breathtaking for a young person. Debt settlement or debt consolidation services helps you to consolidate of all the accounts allows the student to stretch loan liability out to as far as thirty years, often cutting in half the monthly ten year obligations. But it does mean that by doing the federal loan consolidation over the thirty year time span, a lot more interest will be paid.
There are some guidelines and requirements of debt settlement company for federal student loan consolidation expenses from the federal government and the first is that, consolidation will only occur with federal loans amounting to more than twenty thousand dollars. Additionally, a student must not be in default on any of the loans and must be less than a half time student.
Source
The students of the 21st century are looking at very high debt amounts for their training and bankruptcy laws have gotten much tougher, not allowing students to so easily disengage from fiduciary responsibilities. There are really two types of student loans, federal and private. Each one has peculiarities and requirements that must be met in order for them to be able to have any chance to school loan consolidation.
The first are the federal student loans that are eligible for federal loan consolidation. If a student has federal Stafford loans, PLUS loans, Perkins loans, HEAL loans, Federal FFELP and Direct loans, he has lending agreements that are eligible under Department of Education guidelines to school loan consolidation expenses into one payment. When a college student first leaves school, federal student loans are due in ten years.
Monthly payments are figured on a ten year pay back schedule. With often very high balances, a payment on a single loan can be high but three or four separate accounts due each month can be breathtaking for a young person. Debt settlement or debt consolidation services helps you to consolidate of all the accounts allows the student to stretch loan liability out to as far as thirty years, often cutting in half the monthly ten year obligations. But it does mean that by doing the federal loan consolidation over the thirty year time span, a lot more interest will be paid.
There are some guidelines and requirements of debt settlement company for federal student loan consolidation expenses from the federal government and the first is that, consolidation will only occur with federal loans amounting to more than twenty thousand dollars. Additionally, a student must not be in default on any of the loans and must be less than a half time student.
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