Obama to recommend termination of FFEL.

[novastorm]

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I bring this up in the more relevant high and high traffic allo forum. Anyone not having their loans disbursed?

 

[badasshairday]

What is FFEL?

 

[Jolie South]

FFEL loans include Sub and Unsub Staffords. They are guaranteed through private banks with subsidies paid to the banks by the government.

Obama wants to stop this practice because the subsidies cost taxpayers $618 for every $10K loaned. The loans would instead be disbursed through the Direct Loan program with savings invested in more Pell grants. The availability of the loans won't change.

That's the gist of the brief article I read.

 

[novastorm]

This wont prevent the current lenders from not providing money for next year right now is why I ask.

 

[TMP-SMX]

You'll be fine for this year. There is also a financial aid forum where this should be posted.

But it's about time we go to Direct. There was once upon a time when lenders gave incentives but that is long gone. Many lenders are also not following through with the promises for incentives made even two years ago. It's better for everyone to have Direct loans.

 

[Doctor Bagel]

You'll be fine for this year. There is also a financial aid forum where this should be posted.

But it's about time we go to Direct. There was once upon a time when lenders gave incentives but that is long gone. Many lenders are also not following through with the promises for incentives made even two years ago. It's better for everyone to have Direct loans.

👍

 

[alphaholic06]

I bring this up in the more relevant high and high traffic allo forum. Anyone not having their loans disbursed?

This is actually a good thing.

 

[TGAmed]

Does that mean, though, that the first $9,000 or so that we accrue every year will be unsubsidized?

 

[Doctor Bagel]

Does that mean, though, that the first $9,000 or so that we accrue every year will be unsubsidized?

Direct loans have the same breakdown between subsidized and unsubsidized as stafford loans. You won't lose any of those protections by the switch. The big difference is that instead of borrowing a loan through a private bank that's guaranteed and regulated by the federal government, you're borrowing directly from the government. Private lenders argue that the downside to borrowers is that we won't get to choose our lenders and might wind up with worse offers and service. However, lenders these days are giving pretty much no incentives beyond the basic loan guarantees, and I doubt many of us are huge fans of the customer service provided by our lenders.

 

[anonanonanon]

but isn't it likely that once the economy picks up, lenders will start competing with each other more and give more incentives like they used to?

 

[Jolie South]

but isn't it likely that once the economy picks up, lenders will start competing with each other more and give more incentives like they used to?

well, all the loan scandals and crappy incentives happened before the economy tanked, so I wouldn't be so sure about that.

 

[SoCuteMD]

but isn't it likely that once the economy picks up, lenders will start competing with each other more and give more incentives like they used to?

The economy is picking up, there have been MANY incentives to the banks to start lending money, and they still aren't doing it.

The lending environment of the last few years (not just student loans - everything) was incredibly loose and free. It is unlikely that we'll see a return to that level of carefree lending ever again in our lifetimes.

 

[TMP-SMX]

I'm doubting student lending will return to any large degree because there are a lot more restrictions set by the government because lenders were making way too much money on students along with the shady connections with financial aid offices and "preferred lenders".