By Matt Hawes
No surprise there.
From The Christian Science Monitor:
That’s because the biggest change is in who administers student loans. Instead of private banks issuing loans guaranteed by the government, the government will now become the originator of the loan.
“That’s very important for students, but it isn’t going to be very visible for them,” says Sandy Baum, an independent policy analyst for the College Board, a New York-based nonprofit that tracks and promotes college attendance….
But financially, the bottom line will look the same for students – for now.
Eventually, students with federal loans will qualify for better repayment terms. Part of the legislation signed today also improves repayment terms first enacted last summer. Loan payments will be capped at 10 percent of a student’s disposable income (it’s currently 15 percent) and any debt remaining after 20 years will be forgiven (the current threshold is 25). For public servants – including teachers, nurses, or members of the armed forces – that cap is 10 years.
But, those repayment terms are only applicable for loans signed after July 1, 2014, and will not be retroactive, nor do they apply to private loans….