On March 30, President Obama signed legislation that includes some significant changes to the way student loans will be managed. So what does all of this mean for college students everywhere? And more importantly, what does this mean for WGU students?
Here are some quick facts about the new legislation:
- Beginning July 1, 2010 all federal student loans will be issued directly through the government. This will eliminate the fees that the government pays to private lenders (like Sallie Mae and the Student Loan Corporation) that provide federally insured student loans to college students. To prepare for the pending legislation, WGU started awarding Direct Loans to all students with loans on March 1, 2010.
- According to the Congressional Budget Office, the direct lending from the government to the student will save nearly $68 billion over the next 11 years.
- The savings from bank fees will be used to increase Pell Grant awards, raising the maximum grant from $5,550 to almost $6,000 by 2017.
- Monthly loan repayments for students who take out loans after July 1, 2014 will be no more than 10 percent of a graduate’s income (after adjustments for basic living costs), instead of the current 15 percent.
- For those who have been faithful to their repayment plan for 20 years, any remaining loan balance will be forgiven. For public service professionals, like teachers and nurses, these balances will be forgiven after 10 years.
If you are a current WGU student with a student loan or if you have taken out a loan for school after March 1, 2010, these new regulations will only change the way your loan is administered and serviced. In fact, there’s a good chance you won’t notice that anything has changed! If you have any questions regarding financial aid or your loan, please visit the WGU Financial Aid Web Page or call 1-866-225-5948.
