Major changes in the federal student loan programs took place on July 1, 2010. Here are some college loan changes that you should know about:
All federal students loans are now called Direct Loans. You no longer need to contact a private lender or bank to obtain a federal loan. This system is simpler and will cost you less. The Federal government will make loans directly through the college. Since this system will do away with some of the subsidies banks have enjoyed on the taxpayer’s dime, this should save the American people several billions of dollars.
Undergraduate Subsidized Stafford loans have dropped from 5.6% to 4.5% for families with incomes under $80,000 and the federal government will usually pay the interest on these loans while the student is enrolled in college. Some PLUS and GRAD PLUS student loan interest rates of 7.9 – 8.5% (or more) will be reduced to 7.9%.