Over the past few years, student loans have witnessed many notable changes. May it be the policies, terms, conditions, interest rates or eligibility criteria, student loans have changed by great leaps and bounds. According to experts, student loans in 2015 will be different and new. Megan McClean, the managing director of National Association of Student Finance Aid Administrators, states that 2015 will be easy on students. And, you can expect five interesting changes in student loans. These changes will certainly redefine your reimbursement experience.
Change #1 – Rise and Fall of Interest Rate
According to McClean, the interest rate of Federal Student loans may rise or fall. As potential borrowers, you must be prepared to survive unexpected fluctuations. The change in interest rate will be extremely prominent in PLUS loans, Direct Subsidized and Direct Unsubsidized loans. The changes will be based on the 10-year Treasury rates of interest. Nevertheless, the Federal student loans will be everyone’s favourite choice due to its flexible and student friendly features. It will be a safe loan for everyone. Conversely, the new monthly payments will be active between July-2015 and Jun-2016.
Change #2 – A Better Pell Grant
Secondly, you can avail bigger loan amounts from the Pell Grant. According to current recordings, students receive only 5830 USD from the Pell Grant. However, the academic year 2015-2016 will be remarkably different. The monthly payment would increase by at least 100 USD from the current figures. The Pell Grant is designed for families and students with an annual income of 40,000 USD or lesser. Additionally, you are not expected to reimburse Pell Grants.
Change #3 – A New Pay As You Earn Plan
In 2015, the fame of Pay-As-You-Earn would increase remarkably. The Federal Repayment Program owes to reduce student reimbursements by nearly 10%. Moreover, the pay as you earn feature will give you forgiveness from your loan after making monthly payments for 20 years. Currently, students should make payments for 25 years. The US Department of Education states that more than 5 million students will benefit from this amazing scheme.
Change #4 – Accessible PLUS Loans
Do you want PLUS loans to become extremely accessible? If yes, consider yourself lucky! Since, in 2015, Grad PLUS loans are going to become easier and more reachable! Federal Loan lenders tightened the rules and standards of PLUS loans in 2011. As a result, prospective borrowers faced many rejection letters. On the other hand, the Department of Education owes to approve more than 370,000 applications in 2015. Additionally, all PLUS borrowers should undergo loan counselling before acquiring the loan.
Change #5 – A New Rating System
Last but certainly not least, the federal rating system is ought to be published. This is a customized program to rate & rank the outcomes, accessibility and affordability of colleges. The ratings would give students a better insight into the college’s overall value and performance. According to experts, this is an amazing proposal that will help ambitious students with high merits and poor financial backgrounds, make wise decisions.
On the whole, 2015 is ought to be a brand new year for students and lenders! This year will bring great changes that will alter your monthly payments significantly.