changes in student loan lending due to new Health care bill

[FINFAN]

you guys are probably all familiar, but I just found out about this. DD is going to be a Junior this fall and we chose to take out her Stafford loans thru Discover as they had no fee's, low interest etc. I went today to re-apply for her Junior year loan, and was told that due to the Government Regulations involved in the new Health Care Reform Bill, now students must obtain their loan info/service directly from their college, not thru a private lender. I panicked as we have not gone thru the school, always gone private,heard horror stories on the first come , first serve and here it is June and DD did not have an application in...her school is small and the FA officer was calm and eased my fears, we do indeed need to apply for he loans thru them, but they are merely a vehicle to obtain the loan thru. The downside is , if anyone needs a Parent Plus loan, they are at 4% service fee, whereas Discover was no fee. Depending on how much you need to borrow that fee can hurt, big time. At any rate, just a heads up for those in the same boat as me and thought they could re-apply with the same lender they have had already...call that lender and call your kids school and get the 411.
Not starting a political thread, just want to egt the word out on the changes.

 

[pyrxtc]

Banks currently servicing federally-backed student loans will be allowed to continue servicing those loans.

http://usgovinfo.about.com/od/federalbenefitprograms/a/studentaidchanges.htm

The new law will eliminate fees paid to private banks to act as intermediaries in providing loans to college students

Somehow, this just seems really stupid ! What do student loans have to do with the health care bill ?? How can they slip something like this into something called the "Health Care Bill" ?? Something needs to be revised !

 

[SnowWtch]

Our school has been a direct lender for years with Stafford and Parent PLUS loans and a lot of our students and parents are quite happy when they find this out. It's a one stop shop and they don't have to choose a middleman. They make the request and we process it within a week.

 

[bored]

Somehow, this just seems really stupid ! What do student loans have to do with the health care bill ?? How can they slip something like this into something called the "Health Care Bill" ?? Something needs to be revised !

They didn't know what they were voting on to start with. That unfortunately is how.

 

[Green Tea]

This was in place before health care reform. It was not tied to that vote.

 

[pyrxtc]

This was in place before health care reform. It was not tied to that vote.

From my link " The health care reform bill provided for changes in federal student assistance loan and grant programs that will be important to current and prospective students, and their families."

 

[DVCBELLE]

This was in place before health care reform. It was not tied to that vote.

That is not true. My DH works for a company that will probably be put out of business by these changes. It was slipped into the health care bill and that is where the program was eliminated. There was very little anyone could do to fight the bill - even though many people didn't agree with it - once it was in the health care bill - no one considered it when they were voting.

It may be easier to just shop through your school but believe me that this is not a good thing - in the end it will end up costing us all more money - if you have a student loan or not. The cost to run the program will be astronomical.

The new law will eliminate fees paid to private banks to act as intermediaries in providing loans to college students

They will just take all these costs in house now - and we all know how efficient and cost conscience the federal govt. is

 

[msmayor]

Our school has been a direct lender for years with Stafford and Parent PLUS loans and a lot of our students and parents are quite happy when they find this out. It's a one stop shop and they don't have to choose a middleman. They make the request and we process it within a week.

I agree. The school my daughter attends has always been a Direct Lender school, and it is incredibly simple to deal with.

 

[Mom2Ben02]

It was added as a part of the health care bill to turn a no vote to a yes vote.

 

[SportsChick]

I've always just gone directly through my university (I'm a non-traditional student) and it's easy as can be.

 

[dlyn88]

I've always went through my school with no problems at all. Now, the private student loan I had to take out for my study abroad semester was a total hassle! My university has always been very prompt and on top of things. It's been nice to have everything in one place.

 

[Janet Hill]

That is not true. My DH works for a company that will probably be put out of business by these changes. It was slipped into the health care bill and that is where the program was eliminated. There was very little anyone could do to fight the bill - even though many people didn't agree with it - once it was in the health care bill - no one considered it when they were voting.

It may be easier to just shop through your school but believe me that this is not a good thing - in the end it will end up costing us all more money - if you have a student loan or not. The cost to run the program will be astronomical.


They will just take all these costs in house now - and we all know how efficient and cost conscience the federal govt. is

Your husband's company may be out of business, but that's ok, because they only needed x number of employees to do the work and the government will need 4x employess to do the work. Costs will of course rise, but we are still all better off - right?

 

[DVCBELLE]

Your husband's company may be out of business, but that's ok, because they only needed x number of employees to do the work and the government will need 4x employess to do the work. Costs will of course rise, but we are still all better off - right?

Exactly - you got it!!

 

[Pea-n-Me]

How can they slip something like this into something called the "Health Care Bill" ??

It was 1100 pages of confusion. Almost nobody understood it, seriously. Google health care bill confusion if you don't believe me.

 

[rparmfamily]

My sister is also losing her job (Sallie Mae) because of the reform. I think the reason it was tied to the health care bill was to help fund health care with the savings from removing the middleman in student loans.

I have my student loans from my school, UNF, thru NFCU and serviced by Great Lakes. Confusing to me. And it was a PITA, the whole process. The wait, the paperwork,etc.

 

[DVCBELLE]

My sister is also losing her job (Sallie Mae) because of the reform. I think the reason it was tied to the health care bill was to help fund health care with the savings from removing the middleman in student loans.

I have my student loans from my school, UNF, thru NFCU and serviced by Great Lakes. Confusing to me. And it was a PITA, the whole process. The wait, the paperwork,etc.

The worst thing is that they are still going to outsource just to their chosen agencies AND it will cost more than it was before - I think the figures were placed in a different part of the budget to hide it.

 

[amylynne01]

This is really sad news. My husband is in school right now, and the only we can pay is by student loans. We don't qualify for any financial aid through his school, so we have to do private loans. His FA office is also less than helpful and efficient. I'm not sure I want his education in the hands of an office that can't return multiple phone calls and emails.

 

[VagueFury]

Wow, this isn't a political thread. Nope, nothing political about it at all. I'm sure the OP had no political motivation for posting it either.

 

[msmayor]

This is really sad news. My husband is in school right now, and the only we can pay is by student loans. We don't qualify for any financial aid through his school, so we have to do private loans. His FA office is also less than helpful and efficient. I'm not sure I want his education in the hands of an office that can't return multiple phone calls and emails.

Private loans are a different animal, and you still use outside lenders for those. The Direct Lender scenario is only for federal loans under the Stafford and PLUS programs.

 

[lulamc]

I offer a slightly different perspective, I am a financial aid officer. I have worked for schools in the Direct Loan program and I have worked for school that dealt with the lenders. Please believe me when I tell you this is great for students! The entire process is quick, easy, and efficient. I am so glad this change was slipped in the health care bill because it's been a long time coming. Getting a student loan for college will be easier than ever! I do feel bad for my friends in the industry who will lose their jobs, many have already. But for the students and the school it is a win-win.