Welcome to my blog! My name is Lynn and I am a former student loan collector. For over a decade I collected on thousands of accounts for the Department of Education and several FFELP guarantee agencies. I also collected on Perkins and tuition accounts for several major universities. Eventually I a career jump...I became a Financial Aid Officer for a major Big 10 University. Along with awarding financial aid and advising students, I specialized in Default Prevention and Resolution. I am also a frequent contributor and moderator on several online forums.

I have gained very specialized knowledge and skills over the years having worked both side of the student loan field. It really bothers me that there are several companies, individuals, and so-called organizations that will change you hard earned money for information that is readily available free on the web. One "rogue" collector wants to charge $50 for a book and CD's for "secret information". Other organizations will attempt to charge you hundreds of dollars for a Direct Loan Consolidation application which is and always has been, free at the Direct Loan Consolidation website. I will be blogging about student loan collections and simple tips to help you manage your current or defaulted student loans. Have a basic question? I am more than happy to answer it! For free! However if you need more extensive help, I am more than happy to help you at very affordable rates!

Tuesday, April 3, 2012

Changes Coming to Federal Aid in 2012

Pricier Student Loans

Starting July 1, 2012, interest rates on subsidized Stafford loans will jump from 3.4% to 6.8%, reports the Department of Education. Unsubsidized Stafford loan and graduate Stafford loan rates will stay locked at 6.8%.

The government will also eliminate subsidized Stafford loans for graduate students and, for the next two years, will suspend paying the interest on subsidized Stafford loans for undergrads during the six-month grace period between graduation and when students must start paying back their federal loans. Interest that's not paid during that time period will accrue and be capitalized back into the loan, reports the financial aid website, Finaid.org.

The silver lining is students will receive some help paying back loans. Through June 30 of this year, students with both Federal Family Education Loan, or FFEL, and Direct federal loans -- that means at least one federal loan administered by the government and at least one federal loan administered by a bank or other financial institution -- may be eligible to receive up to a 0.5% interest rate reduction on some of their loans if they consolidate.

The government will also relax regulations on federal loan forgiveness for some students enrolled in income-based repayment. Once finalized, the "Pay-As-You-Earn" plan will reduce loan repayment caps from 15% of a student's discretionary income to 10% and forgive all federal loan debt after 20 years of consecutive payments. Who will qualify for the new initiatives and the exact date on when these changes will go into effect have not yet been announced.


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