Student Loans: Read the fine print
Thursday, October 27, 2011
The administration announced some changes in student loans
yesterday with the goal of making them easier to repay. While
the attempt is appreciated, those who think this will help them
should read the fine print.
The administration says you can cap student loans to pay what
you can afford. However, it appears this provision only
applies to loans issued in 2012 or later.
The administration also touts the ability to consolidate
loans. However, if you've already consolidated your student
loans you are not eligible for this provision. Also,
there is a short window to take advantage of this provision that
lowers your interest rate by up to half a percentage point --
from January 2012 through June 2012. Further, this
option is available to you only if you have Federal Family
Education Loans and Direct Loans, and consolidate
them into a Direct Loan. If you only have one of these
types of federally backed student loans, you are not eligible.
Finally, for those who have private student loans rather than
types backed by the government, this new initiative will not help
you. One
publication says these changes might only save $10 a
month. As they say, the devil is in the details.
For more information, click
here,
here and
here.
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