Student Loans and Debt Deal

AEM was first to report about the debt ceiling fiasco and how it would effect student loans. CNN has picked up the story and provided information about what students can expect with the outcome of the debt deal (full story here).

Here are a few points worth noting:

Congress would scrap a special kind of federal loan for graduate students. So-called subsidized student loans don't charge students any interest on the principal of student loans until six months after students graduated.

Congress would also nix a special credit for all students who make 12 months of on-time loan payments. 

The other big cut that Congress is targeting is a credit that all students get on the origination fee they pay the federal government to process their loans. Students pay 1% of the loan as an origination fee, but all students get half of that back unless they miss one of their first 12 payments.

The loss of that credit would cost a student who borrows $5,000 from the federal government $25. This would cost students $3.6 billion over the next decade, according to the budget office

Our politicians clearly have their priorities straight and care about educating citizens. Go Congress. You're looking out for all the right things and entities.  No word on what will happen to variable interest rates and current borrowers. One thing is certain. We aren't even in line anymore when it comes to Congress. The indentured educated class has truly been betrayed and on so many levels by this debt deal. It's time we unite and do something about it. Stay tuned for strategy plans.

Related Links


"Quick Update: Default, The Debt Ceiling Fiasco, and Interest on Your Student Loans," AEM (July 31, 2011)

Pedro Nicolaci da Costa, "Default cloud hangs over U.S. job market," Reuters (July 31, 2011)

Progressive Co-Chair Rep. Raúl M. Grijalva Statement on Emerging Debt Deal, Official Statement (July 31, 2011)

Gregory Floyd, "It's Time to Question Labor's Ties to Democrats," HuffPost (July 30, 2011)

"Debt Ceiling Fiasco and Student Loans," AEM (July 30, 2011)

"Who's Terrified? Debt Ceiling Fiasco and Student Loans," AEM (July 29, 2011)

"Call to Action: Tell Leaders in D.C. to Raise the Debt Ceiling," AEM (July 28, 2011)

"Sell Those Indenture Instruments Immediately! The Debt Ceiling Disaster and Student Loans," AEM (July 25, 2011)

"The Debt Ceiling Fiasco and Student Loans," AEM (July 25, 2011)