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July 1 Brings Higher Rates, Other Changes for New Federal Student Loans

Interest rates and fees rise, subsidized loans won’t accrue interest during grace period

Oakland, CA – July 1 is when most changes to federal student aid go into effect for the coming school year.  Several are lined up for 2014-15, including higher interest rates on new student loans for undergraduates, graduate students, and parents. The Institute on College Access & Success’ (TICAS) Project on Student Debt has created a new easy-to-read chart with interest rates, loan amounts, and other useful information about federal loans issued in 2014-15.

In 2013, Congress changed the interest-rate rules for federal student loans. Rates for new loans are now set each year based on the 10-year U.S. Treasury note rate in the spring of that year plus a fixed percentage that varies based on the loan type. Those rates are then fixed for the life of the loans.

“Federal student loans are still the safest way to borrow for college, with fixed rates, flexible repayment options like income-based repayment, and consumer protections like discharges when schools close,” said Lauren Asher, TICAS president. “But with interest rates on the rise, federal loans are expected to cost students and families more over time than if Congress had simply left them alone last year. Without clear information about the benefits of federal loans, news of rising rates may lead more borrowers to take on much riskier private loans instead.”

The rates for new loans this year are lower than if Congress had let the old rules stand, but beginning next July, the rates on some loans are expected to be higher than under prior law.  According to Congressional Budget Office (CBO) projections, rates for new loans will rise substantially over the next decade and generate $127 billion in government profits at borrowers’ expense.  Under prior law, interest rates would have consistently been 6.8% for all Stafford loans and 7.9% for PLUS loans. Under currentlaw, CBO projects rates for undergraduates to exceed 6.8% by 2017, and rates for graduate students and parents to top their old levels in 2015, just one year from now.

The changes coming on July 1 also include some good news for students and families:

  • For new subsidized loans, interest won’t accrue during the six-month grace period before the first payment is due.  (This benefit was temporarily eliminated for subsidized loans issued in 2012-13 and 2013-14.)
  • The maximum Pell Grant will increase by $85 to $5,730 (up from $5,645), financed by savings from cutting costly middlemen out of the student loan process back in 2010. However, even with this increase, the maximum Pell Grant will cover less than a third of what it costs to attend a four-year public college, the smallest share since the program began.

And here’s how the higher loan costs break down for federal student loans issued in 2014-15:

  • Fixed interest rates
    • Stafford loans for undergraduates: 4.66% (up from 3.86% for loans issued in 2013-14).
    • Stafford loans for graduate students: 6.21% (up from 5.41% for loans issued in 2013-14).
    • Parent and Graduate PLUS loans: 7.21% (up from 6.41% for loans issued in 2013-14).
  •  Origination fees
    • Because of budget sequestration enacted by Congress in 2011, origination fees will rise for federal Direct loans disbursed on or after October 1, 2014. For Stafford loans the fee will be 1.073% of the loan principal (up from 1.072%); for PLUS loans it will be 4.292% (up from 4.288%).

TICAS’ 2013 white paper includes detailed recommendations to keep federal student loans affordable, streamline the loan program, and better target benefits, as well as broader reforms to increase college affordability and completion.

For more information on new student loan terms, please see our summary of Federal Student Loan Terms for 2014-15.

Now Hiring: Enrollment Representative

1-on-1 Learning with Laptops Tutoring Company is hiring for an Enrollment Representative. 1-on-1 Learning provides free tutoring services to eligible K-12 students, funded through the No Child Left Behind Act and we are looking for people who are passionate about improving children’s lives through education.

The role of the Enrollment Representative is to promote awareness and educate parents about the laptop tutoring program by going door to door in order to inform them about the resources.  Responsibilities include working as a team, distributing flyers, collecting contact information, increasing public awareness, attending local community activities and district events on behalf of the company, administrative duties, and typing/data entry. The requirements for the position includes someone who is bilingual (fluent in Spanish and English a plus), reliable transportation with valid insurance, a smart phone with camera and picture messaging, and sales background experience is a plus.

This is a full-time, seasonal position (40 hours per week), approximately three to four weeks with opportunities available for future projects.  The pay rate is $11 per hour with a monthly cell phone stipend of $25 and bonuses.

For more information, please contact Daniel Flores at (310) 473-0404 or by email at danielf@1on1laptops.com.

 

InTime Ministries to Host Empowerment for the “Whole” Woman: It’s Our Time! Roundtable

Dr. Terri Easley

Dr. Terri Easley

RIVERSIDE, CA — If you are in the bloom of a new marriage or relationship and want strategies to develop a deeper level of intimacy, or if your marriage has some miles or issues and could use a tune-up, and if you are closer to Divorce Court than the altar and you need a word from the Lord then this roundtable is for you. There is also something for single sisters, whether never married, divorced, widowed or just feeling lonely, invisible, discounted and disrespected with the deepest yearnings to belong; there is something for the “whole” woman.

‘Empowerment for the “Whole” Woman: It’s Our Time’ Roundtable will take place on Saturday, June 28 from 9 a.m. to 12:30 p.m. at Praise Tabernacle Bible Church located at 4550 Eucalyptus Avenue in Chino (91710).  Come hear anointed testimonies and invaluable insight from panelists. The keynote speaker and host is Dr. Terri Easley, author of Seasons of Destiny who will be ministering on “Marriage: A Walk of a Lifetime” (based on Chapter 2 from her book). There will also be leader breakout session led by Dr. Diana White Johnson on “Submission: A Key to a Powerful Godly Marriage”; Linda D. Wright on “Rules of Engagement for Co-parenting (the impact on children)”; and Victoria Menzies on “Singles: The Fear of Losing Control”. There will also be a general session followed by Q&A. Light refreshments will be served. The cost of the conference is $10.00 in advance or $12 at the door. For vendor registration email, lizalight@aol.com. Register today by visiting www.intimeministries.com or calling (951) 710-9608.