Graduation season is here. Which means student loan bills are close behind.
Students received an early reminder of their looming debt a few weeks ago, when a new law overhauled the federal lending program. Under the rejiggered system, the Education Department will provide all federal loans through college financial aid offices starting July 1.
Previously, families were able to obtain government-backed loans from private lenders through the Federal Family Education Loan program, or FFEL.
Students who already have FFEL loans won’t be required to make any changes. But there are scenarios when it makes sense to switch over to the direct loan program.
In the meantime, the government expects to save $68 billion over the next decade or so by ending the subsidies it paid to private lenders. The savings will be used in part to boost education grants to the neediest students starting in 2013.
There are no benefits for those who already took out loans. Still, there are some payment options new graduates will want to keep in mind.
Payment plans
Graduates don’t have to fear being handed a bill with their diploma; most federal loans come with a six-month grace period. But interest continues accruing during that time, so the sooner repayment starts the better.
FULL STORY: http://www.msnbc.msn.com/id/36966903/ns/business-personal_finance/
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