Students can now borrow more loan money
Dependent full-time undergrads applying for government Stafford loans can now apply for $3,500 for their freshman year; $4,500 for their sophomore year; and $5,500 thereafter. Graduate and independent students have also had their maximum loan amount increased due to changes Congress passed in 2007.
Interest rates reduced
Undergraduates will pay 6% interest on subsidized Stafford loans during the 2008-2009 school year. That rate is scheduled to drop gradually each year to 3.4% by 2011-2012.
Changes to loan forgiveness
Here’s a great incentive to work in the public service sector: the government will forgive outstanding balances on a federal direct loan after you’ve made 120 monthly payments on the loan (after October 1, 2007) if you work full time in a public service job.
Reduced monthly payments are also available to graduates with low incomes.
For more information about student loans, visit www.finaid.com.
For more information about finding money for college, visit our BBB links:
Financial Aid for College (explanation of different government loan programs and tips for avoiding scholarship scams)
Scholarship Services (explains how legitimate scholarship services operate and lists the warning signs of services that aren’t)
Responsible Debt-Management While You’re in College (tips for helping students make sound financial decisions while in college)
The Search for College Funding Requires Homework (tips for avoiding financial aid scams)
BBB Warns College-Bound Students and Parents to Beware of Financial Aid Schemes (more tips for avoiding financial aid scams)