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Today on MyMoneyLife with Chuck Bentley

Monday, October 19, 2009

Student Borrowing

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Chuck Bentley Don’t look now, but Congress is working on major changes in the way college students borrow money for tuition, books, and other expenses.

The House of Representatives has already passed the so-called Student Aid and Fiscal Responsibility Act and they’re working on a similar bill in the Senate.

So, what changes are coming?

Well, according to SmartMoney.com, the legislation would dramatically change student loan practices, forcing most students to borrow directly from the federal government.

Now, here are the top 3 changes coming if legislators get this bill passed:

Fewer choices. The legislation would eliminate subsidies for Stafford and Plus loans that are serviced by private lenders. Now, that will force most students into the Federal Direct Loan Program. Analysts say many private lenders would simply stop making loans altogether.

Higher interest payments for Perkins loans. The new legislation increases funding for Perkins loans and makes it easier to qualify, but it also ends subsidies on Perkins interest payments so students will be charged interest while they’re in school.

Deteriorating customer service. Private lenders know you can go someplace else if you don’t like how you’re treated. Now, that won’t be an option if the federal government has a virtual monopoly on student loans.

Now, critics of the proposed legislation argue that it could lead to yet another federal bureaucracy, but an even bigger question is, should the federal government really be taking on more debt these days? Well, I for one certainly don’t think so.

Borrowing for Education

If it is truly God’s will for individuals or their children to attend college, He will supply the funds.

Paying for College

How will we ever pay for our children’s college education?

Repaying Student Loans

What can we do about our student loans?

Avoid College Debt

You can graduate from the college or university of your choice without financial bondage.