Important Changes to Federal Loans as of July 1, 2010
Several significant changes to federal student loans take effect today that will benefit new and current borrowers. Some interest rates will drop, the maximum Pell Grant increases by $200, and updated rules for Income-Based Repayment (IBR) will bring fair treatment to married borrowers and those who owe more than when they finished school. Also, all federal student loans made on or after July 1 will be Direct Loans, which come straight from the U.S. Department of Education.
See an explanation of all the federal student loan changes that go into effect today. We have updated the IBR calculator on IBRinfo.org so you can check how these changes would affect you. Some people will be eligible for IBR who were not before. If you are already using IBR, are married, file taxes jointly with your spouse, AND your spouse also has federal loans, contact your lender about updating your payment plan to reflect the change.
ACT NOW to Protect Career College Students
Earlier this week we told you about the need for the Department of Education to define "gainful employment," so that it's clear when career education programs are not providing a meaningful education and real economic opportunities for their students. Taxpayer dollars (in the form of federal grants and loans) should not subsidize programs that over-charge and under-deliver.
As of today, the Department of Education still has not sent the proposed regulatory definition of gainful employment to OMB for approval. Time is running short for them to do so in time for these important rules to take effect next year. Students and taxpayers shouldn't have to wait until 2012 for protection from rip-off career education programs. Urge Secretary Duncan and OMB Director Orszag to act quickly at www.protectstudentsandtaxpayers.org!
Last week, a broad coalition of advocates for students, consumers, higher education, and civil rights sent this letter to Duncan and Orszag urging them to move fast on a definition of gainful employment. They need to hear from you too!
(This message was sent to the Project on Student Debt mailing list on July 1, 2010.)