Reform Bill Will Lower Student Loan Payments For Some Graduates

Online, September 9, 2010 (Newswire.com) - College students and their families should find the student loan process simpler, and lower-income students and those with large loan burdens should find the financial aid process easier given the recent changes in student loan regulation that were attached to the landmark health-care legislation that Congress passed. Student loan reforms, which substantially reduce the role of bank as middlemen in the federally subsidized student loan market, would also lessen the burden for some graduates as they pay back their loans.

The new law still allows private lending institutions to make private unsecured personal loans, but the federal government does not subsidize private loans any longer. If you are interested in finding out more about using unsecured personal loans to finance educational expenses, click here.

Currently, students are required to pay a maximum of no more than 15 percent of their incomes each month on the loans. The new law will drop the maximum payment 10 percent of income.

The measure, which enjoys a high degree of support from the public, also aims to simplify the student loan process and offers more financial help to lower-income students. The bill expands the popular Pell Grant program, which provides assistance lower-income students. The new law provides $13.5 billion for help to pay for projected shortfalls in the program for the next two fiscal years, and increases the maximum award to $5,550 next year and nearly $6,000 by 2017.

Under the Federal Family Education Loan Program, banks and other lenders have traditionally made loans under a Federal "guarantee." As of July 1st, this program will cease, and student loans will continue to be offered directly by the government. Students will still have the option to finance their education privately, through unsecured personal loans and other traditional forms of credit. According to polls, a significant majority of Americans support the reforms, with 64 percent saying they approve of the law, while 34 percent are opposed. Many student groups and Democratic lawmakers praise the changes as long-overdue.

Find out if an unsecured personal loan of $10,000 to $250,000 is what you need. Click here to learn more.