President Obama Announces Federal Student Loan Reform
President Obama recently announced his federal financial aid reform plan that would completely overhaul the federal student loan program as we know it. Currently, federal student loans are guaranteed by the government, but the government doesn’t actually collect any money for doing so. Instead, that money goes into the pockets of the banks and lending institutions that actually issue the student loans. This may all change soon.
President Obama’s new student loan reform plan would take the nearly $100 billion dollars in interest and charges collected by banks for issuing student loans each year, and put it towards increasing student loan limits as well as increasing the amount available for the Pell Grant. This could give billions of dollars directly back to students in the form of higher student loan limits and far more grant money.
The potential downside of the plan includes the amount of jobs lost at banks and lending institutions due to the huge loss in revenues that student loans bring in each year. The upside of the plan is that more students will be able to pay for college with federal funds, an increase in the amount of the Pell Grant, and a potential decrease in interest rate charges for students over the life of their student loans. Obama also claims that the plan will save tax payers about $95 billion over the next decade if the direct government student loan lending initiative passes.
Consolidating student loans is a way to reduce student loan payments, lower interest rates and to make student debt easier to manage. Here at Consolidating Student Loans, you'll find a wealth of information related to students loans and consolidation. Thanks for stopping by, and make sure to grab our RSS feed to stay up-to-date with the latest student loan news.
