New Student Loan Help
November 27, 2007
There is some good news for student loan seekers. A few new programs are set to begin soon and those who qualify for one or more can save some substantial cash by using them.
Under a new Federal law, more people will now be able to qualify for and receive more from the Pell Grants program. Pell Grants are given to those students who have a financial need. The grants are scheduled to increase to a maximum of $5,400 per year over the next five years. The maximum is currently set at $4,310.
Stafford loans are another needs based program and the interest rate on subsidized Stafford loans will begin to drop to 3.4 percent over the next four years. This is half what the current rate is. For those unsubsidized Stafford loans the rate will remain at 6.8 percent.
A major change set to begin in July 2009 is that instead of grad students making fixed payments over the course of a decade, they will be allowed to make payments that equal about 15 percent of their yearly discretionary income.
In addition, the government will pay the interest on subsidized loans for up to three years if the reduced payments are not high enough to cover that cost. They will also forgive the balance on subsidized and unsubsidized loans after twenty-five years.
Students who commit to teach for four years after graduation may apply for yearly grants of $4,000 to help pay for college costs. These grants must be repaid, however, if the student does not later teach.