The Patient Protection and Affordable Care Act is the largest reform the health industry has ever seen. But the bill also reformed another U.S. market- the student loan system. The federal government is now the direct lender of *all* higher education loans. Private lenders are no longer an option.
By July 1st every college and university must be in compliance. While many schools across the nation are scrambling to get on board, Virginia Military Institute is taking it easy. They made the switch to all federally funded loans back when it was first offered in the early 90s.
Colonel Golden at VMI says “I had high anxiety back then doing it, because you didn't know if you were going to need extra people, how you'll get the process to go.”
Colonel Golden says the Department of Education is asking schools like VMI to be on stand-by to help other colleges and university during the switch.
Golden has been closely following the student loan reform talks for a while, and says it's all about savings.
“Originally they identified about eighty billion dollars in savings because the government wouldn't pay any special interest rates to the banks.” That $80 billion later dropped to $60 billion dollars in savings, but CNN.com reports that more than half of that savings will go towards the Pell Grant program, which helps low income families pay for college tuition.
For the millions of students with existing loans, it doesn't change your current terms. It will lower the cap on monthly payments, though. The cap will be from 10 to 15 percent of your discretionary income.
Colonel Golden says “For a school to be in compliance it's a matter of getting the software up and running and network compatible.”
Email
Facebook
Google
Twitter
Favorites
More
Advertisement