With all this talk of the impending Stafford Loan interest rate hike, many other regulation changes have been overlooked. Starting July 1, there are a handful of other updates to federal loan programs that borrowers should be aware of. These changes will not affect loans that were originated before July 1, only loans originated for 2012–2013.
Here’s a breakdown of what you can expect to see for this upcoming academic year:
Subsidized Stafford Loan Changes
No more subsidized loans for grad. students — Just like undergraduates, graduate students were previously able to receive both subsidized and unsubsidized loans. Starting this year, only unsubsidized loans will be available for grad. students at a 6.8% interest rate.
Elimination of interest subsidy for grace periods — Subsidized Stafford Loans were less expensive than their unsubsidized counterparts because 1) the interest rate was lower and 2) interest was subsidized while enrolled in school and during the 6 month grace period after leaving school. Starting this year, there will be no interest subsidy during grace periods, however, the subsidy will still exist while enrolled in school at least half-time.
UPDATED: Extension of reduced interest rate — As I’m sure most students have heard, a bill was set to expire this year, doubling the rates for Subsidized Stafford Loans to 6.8%. Luckily, Congress just passed a bill to keep the rate at 3.4% for the 2012-2013 year. Learn more about Stafford interest rates, past and present.