New Student Loan Consolidation Rates Will Now Make Millions of Americans Eligible for Refinance
With the new student loan consolidation rates that go now into effect millions of Americans will be eligible to refinance their student loans. Thanks to the new Health Care and Education Reconciliation Act of 2010 signed by President Obama, not only current and future college students will be the only individuals to benefit from the legislation. Millions of people in the United States are now potentially eligible to refinance their student loan debt at new, lower student loan consolidation rates.
As college costs are on the rise, many search for private student loans or federal education loans as families will not be able to use current income, and savings to pay for all the costs and they should most likely have to borrow money. According to the College Board, average total costs for studies in 2009-2010 were $35,636 at private universities and $15,213 for in-state students at state colleges.
An important change occurred recently, when all federal student loans became direct loans, originated by the U.S. government. Previously, most colleges participated in the Federal Family Education Loan (FFEL) program and eligible students at those schools would get federally guaranteed student loans through a bank or another lending institution. Although the FFEL consolidation loan was one of the student loan options, people are now searching for more financial aid options as nobody wants to pay unnecessary interest these days.
But now with the new student loan reform bill, which went into effect this month, contained several benefits to help college students finance their educations. This includes lower loan rates, and increased Pell Grant award amounts and also income based repayment amounts. Marriage penalty was also eliminated from the legislation and new payment calculation models were introduced that made loans available to more families. These benefits are mostly aimed at current and future borrowers.
With the first of these benefits going into effect as of July 1st, 2010, the new student loan consolidation rate is 2.47% and current students aren’t the only ones refinancing. Former students who used loans to cover tuition and costs but are now dealing with the financial burden of repayment will also benefit from one significant provision, if their loans were originated prior to July 1, 2006.
Among the student loan options are the Stafford loans for which no credit check required.
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Posted by Denis Norris
on Jul 29 2010. Filed under Featured News, Finance.
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