Will Fixed Rates Upon Consolidation Be A Thing Of The Past?
St. Petersburg, FL (PRWEB) June 10, 2004
On April 29, Rep. John Boehner (R-OH), chair of the Committee on Education and the Workforce, introduced the College Opportunity for All Act (H.R. 4283), a bill to reauthorize the Higher Education Act (HEA) of 1998. The programs authorized under the original act, including provisions that deal with student aid, financial assistance, and supplemental services to students, are set to expire during this Congress.
The House of Representatives is proposing changes to the current act that are designed to assist Ânontraditional college students. ÂNontraditional college students, as defined by the AAUW (American Association of University Women), are students over the age of 25, work full-time, are pregnant or parenting, are displaced homemakers or who attend college part-time or less than part-time. According to the AAUW these students represent three-fourths of all college students and are predominantly women. Although such proposals may behoove Ânontraditional students, a growing concern of dismissing recent graduates escalates.
A petition by Rep. Boucher seeks to eliminate the fixed rates of student loan consolidation entirely, thereby making the repayment of student loans a seemingly insurmountable certainty. With the Federal cap on student loans as high as 8.25%, Rep. BoucherÂs proposal could equate exorbitant monthly payments and thousands of dollars in unnecessarily paid interest for borrowers alike.
At todayÂs low in-grace rates (2.82%), a borrower with a $ 50,000 balance upon graduating will have a monthly payment of $ 233.87 and spend $ 11,051.57 total in interest. Comparatively, a borrower repaying $ 50,000 at the Federal cap (8.25%) will endure a monthly payment of $ 394.23 and spend $ 46,549.44 in interest over the life of the loan. Eliminating the fixed interest rate, available through consolidation, would cost this borrower $ 35,497.87 in unnecessary interest charges over the life of the loan.
ÂThere has never been a better time to consolidate. With no credit checks, fees, or pre-payment penalties, there is no reason for graduates not to take advantage of this free Federal program and consolidate their loans now, urges Janel Landis, a spokesperson for American Collegiate Financial Services (ACFS). Students should file consolidation applications immediately in order to ensure a fixed interest rate on their consolidated student loan before Congress has a chance to alter the existing Act.
Students wishing to file a consolidation application should do so at www.OneStudentLoan.com, or contact an ACFS Loan Expert at 1-800-304-1471 immediately.
About ACFS
ACFS is set to become the nationÂs leader in providing financial assistance to student loan borrowers. Its purpose is to educate students and parents regarding student loan debt. Since its inception in 2002, ACFS has assisted thousands of borrowers in the management and consolidation of over $ 1 billion in student loans. ACFS makes higher education more affordable through an innovative loan product and superior customer service. ACFS, based in St. Petersburg, FL, offers the nationÂs best student loan advice at 1-800-304-1471. For more information on ACFS, visit www.OneStudentLoan.com.
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