Drastic Student Loan Consolidation Changes in Proposed 2006 Federal Budget
With the number of sweeping changes proposed in the 2006 budget, and the possibility that the budget may be passed as written, graduates and students graduating in 2005 are urged to file student loan consolidation applications as soon as possible. Student loan consolidation companies such as StudentLoanConsolidator.com are accepting applications immediately, and graduates who file their consolidation applications before Congress votes on the budget will be immune to any changes in the program.
Quincy, MA (PRWEB) February 9, 2005 -- On February 7, 2005, President George
W. Bush submitted a proposed Budget of the United States Government: Fiscal Year
2006 to Congress. In the budget, President Bush made clear that funding programs
for students in school such as the Pell Grant would take a higher priority than
assisting students after they've completed their education. In the Office of
Student Financial Assistance Budget, student loan consolidation has been
earmarked for a cut from $34.7 billion to $25.3 billion, a loss of $9.4 billion.
In addition, the 2006 Budget proposes three major changes to the student loan
consolidation program:
First and most important, the 2006 budget proposes
replacing the fixed rate benefits of student loan consolidation with a variable
rate formula equal to current loan balances. This would mean that students,
currently locking in rates of 2.875%, would end up with variable rate loans that
could reach as high as 8.25%, a potential 300% increase in rates.
Second,
the budget proposes allowing students to reconsolidate their student loans at a
fee of 1% of their loan balance. For graduate and medical students, who often
have loan balances of $100,000 or more, this could translate to reconsolidation
fees of thousands of dollars; currently, students pay no fee for any kind of
student loan consolidation.
Third, the budget proposes doubling the fees
that lenders are charged, from 0.5% to 1.0%. As lenders will need to absorb a
doubling of their loan origination costs, benefits such as interest rate
discounts offered to graduates may decrease or be eliminated. Additionally,
because of the $9.4 billion proposed cut, lenders will need to search for ways
to recoup the loss of federal funds, either by making consolidation requirements
more stringent (i.e. requiring higher loan balances) or reducing
benefits.
With the number of sweeping changes proposed in the 2006
budget, and the possibility that the budget may be passed as written, graduates
and students graduating in 2005 are urged to file student loan consolidation
applications as soon as possible. Student loan consolidation companies such as
StudentLoanConsolidator.com are accepting applications immediately, and
graduates who file their consolidation applications before Congress votes on the
budget will be immune to any changes in the program. Christopher S. Penn,
director of StudentLoanConsolidator.com, said, "Right now, with the lowest fixed
rates in 39 years, generous discounts, no fees, no credit checks, and no
penalties for early repayment, there's never been a better time to consolidate
student loans. With the changes proposed in the 2006 budget, graduates would be
able to save far less money, so the need to act now is very
real."
Students wishing to file a consolidation application should do so
at http://www.StudentLoanConsolidator.com/pr/ or call toll-free
(877) 328-1565 immediately.
Sources: Budget of the United States
Government: Fiscal Year 2006 (pages 362 - 381)
Contact Christopher Penn
at StudentLoanConsolidator.com by email at e-mail protected from spam bots for
more information; to apply for a student loan consolidation, graduates should
visit http://www.StudentLoanConsolidator.com/pr/ or call toll-free
(877) 328-1565 as soon as possible.
StudentLoanConsolidator.com is a
service of the Edvisors Network, a multi-national education services company
offering students options for managing the entire education life cycle, from
getting into their college of choice to financing their education and beyond.
The Edvisors Network is based in Quincy, Massachusetts, with offices in Quincy
and London, England. Visit them on the web at http://www.EdvisorsNetwork.com for more information.
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Source : http://www.prweb.com/releases/2005/2/prweb206967.htm