Amendment to Prevent Student Loan Interest Rates from Doubling
Student Loan Repayment
Issues: Education
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With the cost of college tuition continuing to rise and the threat of need-based student loan interest rates doubling in July, U.S. Rep. Karen Bass held a town hall meeting and workshop for Los Angeles student loan borrowers to inform them about the current legislative environment in Congress and to assist college graduates in need of guidance with current loans.
When I examine the extremely negative financial state so many of our nation’s students are facing, it is becomes heartbreaking that the issue is this great. There’s no reason that if advancing one’s education is the answer for ensuring success within our country students should have to leave college with as much debt as a mortgage would cost. It is my mission in Congress to help students who are facing this unprecedented crippling debt before they even enter our recovering workforce. If we truly strive as a country to be economically competitive on a global level, we must make affordable post-secondary education a top priority for every student in America no matter their family’s economic status. - U.S. Rep. Karen Bass
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Tell Congress your story. We know the cost of a college education is crippling graduating students now more than ever. We need a concrete solution to this problem, but first, we need to hear from you. Use the social media platforms below to share your story about struggling with student debt.
Post your story on Rep. Karen Bass' Facebook page
Tweet @RepKarenBass you're story and use #SOSDebt
Record your story as a video and upload it to YouTube
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Additional Resources
Understand your rights and responsibilities as a borrower
A Master Promissory Note (MPN) is a contract. When you borrow federal money for college, signing an MPN enters you into a formal agreement to repay that money.
Like with any contract, it is important to know what signing your MPN means. For you, it means that you have rights when it comes to managing your student loans—and also certain responsibilities.
The U.S. Department of Education's National Student Loan Data SystemSM (NSLDSSM) provides information on your federal loans including loan types, disbursed amounts, outstanding principal and interest, and the total amount of all your loans.
o Understand the repayment options that are available to you.
o Choose a repayment plan that best meets your needs.
o Repayment Plans and Calculators
o You have a choice of several repayment plans that are designed to meet the different needs of individual borrowers. The amount you pay and the length of time to repay your loans will vary depending on the repayment plan you choose.
Repaying Loans
After you graduate, leave school, or drop below half-time enrollment, you have a period of time before you have to begin repayment. This "grace period" will be
- Six months for a Federal Stafford Loan (Direct Loan ProgramSM or Federal Family Education Loan (FFELSM) Program).
- Nine months for Federal Perkins Loans.
Before missing any payments, though, know that under certain circumstances you can temporarily suspend your payments with deferment and forbearance.
You can receive a deferment for certain defined periods. A deferment is a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment, or economic hardship.
- Military Service Deferment
- Post-Active Duty Student Deferment
- Economic Hardship Deferment
Forbearance
Forbearance is a temporary postponement or reduction of payments for a period of time because you are experiencing financial difficulty. You can receive forbearance if you’re not eligible for a deferment. Unlike deferment, whether your loans are subsidized or unsubsidized, interest accrues, and you’re responsible for repaying it.
Communicate with your loan servicer by contacting the Financial Student Aid Office of the Ombudsman.
The Federal Student Aid Ombudsman Group is where individuals can turn after trying other ways to resolve a federal student aid dispute. Assistance request are generated from phone calls, letters and e-mails, and are classified as either general assistance or research problem assistance.
Loan Consolidation
Learn the steps to consolidating your loans.
Consolidation Checklist
Step 1: Take an Inventory of Your Current Student Loans
Step 2: Determine Your Monthly Payment Amount
Step 3: Evaluate Your Monthly Payment Against Your Budget
Step 4: Consider Consolidation
- Federal Direct Loan Consolidation- Borrower Services
- Verify that you are eligible to consolidate your loans.
A Direct Consolidation Loan allows a borrower to consolidate (combine) multiple federal student loans into one loan. The result is a single monthly payment instead of multiple payments.
From January through June 2012, the U.S. Department of Education will offer certain borrowers two options for consolidation:
- Traditional Direct Consolidation Loans
- Special Direct Consolidation Loans
