Progress with Direct Lending

As was mentioned in previous entries, all schools in the U.S. must now administer their federal student loans through the federal government, as the federal government will now serve as the lender. This determination was made on 3/30/10 and all schools must be in compliance by July 1, 2010. This has presented many challenges for schools and these changes have come at the most difficult time of the year, when fall tuition bills are due and students and parents are in panic mode.

That being said, schools will figure this out and there will be loan funds available for students for the coming year and beyond. Some good news to share as well. Interest rates on the federal direct subsidized loans for periods beginning 7/1/10-6/30/11 will be at 4.5%. This is a decrease from the current interest rate of 5.6%.

Another positive is that with the Federal Direct Plus Loan the interest rate is 7.9%.In the previous FFELP Plus Loan the interest rate was 8.5%.

As more information becomes available, I'll be here to let you know.