federal student loan
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Student loan default high
Keeping up with student-loan payments is not a priority for about one-quarter of the students who borrow from the federal government to fund their education.
About $2.6 billion in federal student loans is currently in default, said Heather Hamilton, spokeswoman for the Canada Student Loans program.
The default rate was just over 25% for 2004-05, she added.
That doesnt necessarily mean (the students) have walked away from it, it means theyre late, said Hamilton.
A loan that is 270 days past due is in default. .
More federal student loan info
Student loan lessons
Since late 1992, the two largest federal student loan programs have come with a variable interest rate. But as of Saturday, new Stafford loans are fixed at 6.8 percent and new PLUS loans will be 8.5 percent, a benefit if interest rates continue to rise. Variable rates on loans issued before Saturday that have not been consolidated will be reset once a year.
Higher loan limits
Before, freshmen could borrow up to $2,625 in Stafford funds. The new limit will be $3,500 starting July 1, 2007. Caps for sophomores will go from $2,500 to $4,500, and graduate and professional students will be able to borrow $12,000 a year instead of $10,000.
Because Americans are relying more on loans for college, the higher caps could be a big boost.
Declining origination fees
Fees for taking out a student loan will decline and, in some cases, disappear by 2010.