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As the wrangling over proposed healthcare legislation drags on in the Senate, progress on other bills has stalled, including a piece of legislation that would impact federal student financial aid programs. The Student Aid and Fiscal Responsibility Act, passed by the House of Representatives in September, has yet to see its counterpart taken up for debate in the Senate. Yet the debate over student loan reform is heating up again as the Department of Education and lenders both attempt to press their agendas forward.
Student loan reform has been a topic of contention since President Obama announced his 2010 budget proposal at the beginning of the year. Among them was doing away with the Federal Family Education Loan Program, which subsidizes private banks to make and service federal student loans, such as Stafford Loans and PLUS Loans. Students would borrow directly from the Department of Education through the Direct Loans Program. The money saved from the subsidies would then be channeled into Pell Grants and Perkins Loans, among other education funding priorities. The proposed changes would go into effect on July 1, 2010 necessitating a quick switchover to direct lending for all colleges still participating in FFELP.

Student Loan Debate Continues as Legislation Languishes behind Health Bill

November 12, 2009

by Scholarships.com Staff

As the wrangling over proposed healthcare legislation drags on in the Senate, progress on other bills has stalled, including a piece of legislation that would impact federal student financial aid

The much-lauded new Income-Based Repayment plan for federal student loans has been available to student borrowers since July, but those who could potentially benefit may have difficulty enrolling in it. The Department of Education's Direct Loans website allows borrowers to enroll online in several student loan repayment plans, including the Standard, Graduated, and Income-Contingent options using a convenient drop-down menu. However, after over three months Income-Based Repayment is still missing from this menu, making it more difficult for borrowers to enroll in this plan, and possibly preventing some students from even realizing it's an option.

Technical Difficulties Complicate Income-Based Student Loan Repayment

October 9, 2009

by Scholarships.com Staff

The much-lauded new Income-Based Repayment plan for federal student loans has been available to student borrowers since July, but those who could potentially benefit may have difficulty enrolling in

As the Senate prepares to begin looking at similar measures recently passed by the House to stop or further regulate bank-based lending, student-loan companies have been looking for ways to lobby for their own cause, spending millions in the process, according to an analysis of federal records done by The Chronicle for Higher Education.

Student Loan Bill Meeting Challenges Before Senate Vote

September 28, 2009

by Scholarships.com Staff

As the Senate prepares to begin looking at similar measures recently passed by the House to stop or further regulate bank-based lending, student-loan companies have been looking for ways to lobby for

Despite some Republication opposition, The House of Representatives voted 253-171 to approve a bill Thursday that would stop lending from the bank-based Federal Family Education Loan Program in favor of the Department of Education-run Federal Direct Loans Program by July 2010. The bill, known as the Student Aid and Fiscal Responsibility Act of 2009, would also increase the current maximum Federal Pell Grant from $5,350 to $5,550 and provide for annual increases to the grant in the years to follow through a $40 billion pool of funding over the next decade.

Student Loan Bill Passes in House

September 18, 2009

by Scholarships.com Staff

Despite some Republication opposition, The House of Representatives voted 253-171 to approve a bill Thursday that would stop lending from the bank-based Federal Family Education Loan Program in favor

The House of Representatives is poised to vote today on legislation to eliminate the Federal Family Education Loan Program and increase funding for Federal Pell Grants. The bill, currently known as the Student Aid and Fiscal Responsibility Act of 2009, is widely expected to be approved by the House, possibly with some amount of bipartisan support. While most of the provisions in the bill have relatively widespread backing, one element has generated a fair amount of controversy. Under the proposed legislation, all federal student loans, such as Stafford Loans and Plus Loans, originated after July 1, 2010 would be part of the Federal Direct Loans Program, rather than the current bank-based system.

House Votes on Student Loan Bill Today

September 17, 2009

by Scholarships.com Staff

The House of Representatives is poised to vote today on legislation to eliminate the Federal Family Education Loan Program and increase funding for Federal Pell Grants. The bill, currently known as

According to newly released data, default rates on federal student loans continued to climb in 2008, reaching a nine-year high of 6.7 percent, most likely as a result of the recession. The annual cohort default rate, released by the Department of Education on Monday, covers federal student loans that went into repayment between October 2006 and September 2007 and had gone into default by September 2008.

Student Loan Default Rates Continue to Rise

September 15, 2009

by Scholarships.com Staff

According to newly released data, default rates on federal student loans continued to climb in 2008, reaching a nine-year high of 6.7 percent, most likely as a result of the recession. The annual

Yesterday, the House of Representatives formally introduced legislation to reshape federal student loans, federal Pell Grants, and other aspects of student financial aid. The Student Aid and Fiscal Responsibility Act of 2009 builds on presidential budget recommendations and features several substantial changes to student aid.

House Introduces Student Aid Bill

July 16, 2009

by Scholarships.com Staff

Yesterday, the House of Representatives formally introduced legislation to reshape federal student loans, federal Pell Grants, and other aspects of student financial aid. The Student Aid and Fiscal

Earlier this week, U.S. Bank announced that it would cease to act as a lender for Stafford Loans issued through the Federal Family Education Loan Program. U.S. Bank was the sixth largest participant in FFELP as of 2008, according to the Student Lending Analytics Blog, yet this news has caused barely a ripple.

U.S. Bank Exits FFELP

July 10, 2009

by Scholarships.com Staff

Earlier this week, U.S. Bank announced that it would cease to act as a lender for Stafford Loans issued through the Federal Family Education Loan Program. U.S. Bank was the sixth largest participant

While it falls in the middle of summer on most academic calendars, July 1 marks an important date for financial aid each year. On July 1, the Education Department switches from the 2008-2009 academic year to the 2009-2010 one, and new federal rules for financial aid go into effect. This means new loan consolidation and repayment options, lower interest rates on some federal student loans, among other changes for students receiving federal student financial aid.

Financial Aid Changes Happening July 1

June 30, 2009

by Scholarships.com Staff

While it falls in the middle of summer on most academic calendars, July 1 marks an important date for financial aid each year. On July 1, the Education Department switches from the 2008-2009

With President Obama's proposal to end the bank-based Federal Family Education Loan Program, there has been much speculation on what role would be left for banks in student loans, as well as which banks would be allowed to play that role. An announcement made yesterday by the Department of Education indicates that at least four banks will remain involved in federal student loans for the forseeable future.

Department of Education Names New Student Loan Servicers

June 18, 2009

by Scholarships.com Staff

With President Obama's proposal to end the bank-based Federal Family Education Loan Program, there has been much speculation on what role would be left for banks in student loans, as well as which

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