Student Loan Reform Plan Unveiled at His State of Union Address
President Obama had a lot to say during his recent state of union address, and whether you thought his ideas were good or bad, his Student Loan Refinance plans are very good news for college students with seemingly endless amounts of student debt. Whether you fall into the category of having multiple student loans to pay back, or you’re repaying a student loan consolidation, it seems that you may soon have legislation in place that may actually save you some money over the life of your loans.
Apply for Student Loan Online reform plan boils down to several key points which I’ve summarized below: Families would receive a $10,000 tax credit for attending four years of college. Pell Grant limits would be increased. Once the repayment period begins, students would need to make payments equivalent to 10% of their current income instead of 20% which is currently the standard.
Any remaining student loan debt will be forgiven after 20 years of paying them back instead of the current 25 years. Additionally, grads who find a career in the public sector will be eligible to have their student debt forgiven within 10 years. Click this link for more information about Student Loans For Bad Credit forgiveness programs.
This new student loan plan would cost the federal government an estimated $1-$2 billion over the next five years. Much of the costs would be carried by the restructuring of the current student loan infrastructure, such as by streamlining the loan process and eliminating private lenders from the equation.
These changes would have a huge impact when consolidating student loans as well. Think about it…Will you even need student loan consolidation anymore? It’s a valid question considering student loan payments would be half what they are currently. This means that paying back Affordable Student Loans rate would be much more manageable than ever before, and may greatly reduce the need for consolidation. Of course, I’m jumping the gun a bit considering these proposed changes to the student loan sector have yet to be put into law, so it could be months or more likely years before we see any of this reform put into law. Until then, consolidating student loans may still be one of the best options available to college grads looking to reduce their payments or lower their interest rates.