New bill simplifies student loans
Hannah Lazar
Issue date: 4/15/10 Section: News
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President Obama signed into law a bill taking effect July 1, that will transfer the power to grant federal loans to the government, rather than allowing private lenders to subsidize the loans.
The bill also provides for an increase in the amount of money given in Pell Grants and allows more students to be able to receive Pell Grants by getting rid of a large amount of corporate welfare.
The effects that this bill will have on students will be that the process of obtaining a loan will be much simpler.
Instead of shopping around for a private loan, students will be able to simply go directly through their schools' financial aid offices.
Another provision that this bill allows for, is that loan payments will cap at 10 percent of a student's disposable income.
At UTC, students will borrow through the William D. Ford Federal Direct Student Loan Program, according to the UTC financial aid office's Web site.
However, only students with federal loan packages will be affected, Brittain Ayres, a Nashville freshman and employee of the UTC financial aid office, said.
Ayres said that the process of filling out a Free Application for Federal Student Aid will remain the same for all students because the FAFSA only serves to calculate a student's need, not to actually award loans.
UTC offered mandatory meetings April 14 for all recipients of federal loans. The purpose of these meetings was to help students who take out loans to understand how the switch to direct federal loans will work.
"I personally am trying very hard not to get a loan," Sarah Gardner, a Hendersonville, Tenn., freshman, said. "However, I can see that the ease of access that comes with this bill will be helpful. Unfortunately, I feel like this ease of access will keep students from checking other options instead of taking out a loan and will later find themselves in debt that they cannot handle."
