Important changes to US student loans
I just received this email from the financial aid office of my college. While it doesn't directly affect me, it'll have a dramatic effect on many grad and professional students. I copied and pasted all the non-college-specific info. Sorry for the weird formatting but that's what emails for our financial aid office look like. I put most of the info under a cut because this only applies to US grad and professional students.
The Budget Control Act (BCA) of 2011 - signed into law on August 2, 2011 -
has made two (2) significant changes to the Direct Loan Program which
will likely affect your financial aid awards and repayment beginning in 2012.
Change #1 - Loss of Subsidized Loan Eligibility for All Graduate and Professional Students
All graduate and professional students (nationwide) will no longer be eligible to receive Federal Direct Subsidized Loans effective with loans made for
students with enrollment periods (class start dates) beginning on or after July 1, 2012. Direct Unsubsidized (interest accruing) Loans will continue to be offered.
What this means to you: If you are a 2012-2013 graduate or professional
(not undergraduate) student, applying for financial aid and whose first
class day for the 2012-2013 academic year is on or after July 1, 2012,
you will not be offered SUBSIDIZED (non-interest accruing) loans
regardless of your FAFSA information. The Federal government has
terminated the Direct Subsidized
Loan program
for all graduate and professional students effective as of that date.
Unsubsidized Direct Loans will be offered instead. The rules governing
the AMOUNTS of Direct Loans for which you will be eligible is not
changing, just the types.
Change #2 - Termination of Direct Loan Repayment Incentives
Effective for loans DISBURSED on or after July 1, 2012
the U.S. Dept. of Education can no longer offer any type of repayment
incentives to Direct Loan borrowers
to encourage on-time repayment of loans. With one exception* this
includes any reduction in the Direct Loan interest rate (including the
up-front interest rebate) or origination fee.
*Interest rate reductions will continue to be allowed for Direct Loan borrowers who have payments automatically electronically debited from an account.
PLEASE NOTE: The availability and total annual of Direct Loan funds for which a graduate/professional student is eligible is not changing. The
amount of Subsidized loan eligibility will be included in your Unsubsidized loan eligibility and award.
The Budget Control Act (BCA) of 2011 - signed into law on August 2, 2011 -
has made two (2) significant changes to the Direct Loan Program which
will likely affect your financial aid awards and repayment beginning in 2012.
Change #1 - Loss of Subsidized Loan Eligibility for All Graduate and Professional Students
All graduate and professional students (nationwide) will no longer be eligible to receive Federal Direct Subsidized Loans effective with loans made for
students with enrollment periods (class start dates) beginning on or after July 1, 2012. Direct Unsubsidized (interest accruing) Loans will continue to be offered.
What this means to you: If you are a 2012-2013 graduate or professional
(not undergraduate) student, applying for financial aid and whose first
class day for the 2012-2013 academic year is on or after July 1, 2012,
you will not be offered SUBSIDIZED (non-interest accruing) loans
regardless of your FAFSA information. The Federal government has
terminated the Direct Subsidized
Loan program
for all graduate and professional students effective as of that date.
Unsubsidized Direct Loans will be offered instead. The rules governing
the AMOUNTS of Direct Loans for which you will be eligible is not
changing, just the types.
Change #2 - Termination of Direct Loan Repayment Incentives
Effective for loans DISBURSED on or after July 1, 2012
the U.S. Dept. of Education can no longer offer any type of repayment
incentives to Direct Loan borrowers
to encourage on-time repayment of loans. With one exception* this
includes any reduction in the Direct Loan interest rate (including the
up-front interest rebate) or origination fee.
*Interest rate reductions will continue to be allowed for Direct Loan borrowers who have payments automatically electronically debited from an account.
PLEASE NOTE: The availability and total annual of Direct Loan funds for which a graduate/professional student is eligible is not changing. The
amount of Subsidized loan eligibility will be included in your Unsubsidized loan eligibility and award.