A new federal law makes some changes in the provisions for the government’s Stafford student loan program. Brenda Easter of the Iowa College Student Aid Commission says one of the changes involves loan limits. Easter says the bill passed by Congress increases the federal loan limits for subsidized and unsubsidized loan programs by $2,000.
She says the goal is to reduce the need for students to borrow through private loans. Easter says the new limits take effect on July 1st. She says the maximum a student can borrow depends on their grade level. New students could borrow a maximum of $3,500 under the old limit, so they would now be able to borrow up to $5,500 under the new limits for the 2008-2009 academic year.
The new law also makes changes to the "Parent Plus" program, which allows parents to take dual responsibility for the loans with the student. Easter says the new legislation allows a parent to defer payment on the loan until after the student completes school, while previously the parent had to begin paying on the loan 60 days after the loan was disbursed.
Easter says the changes give the parents more options in repaying the loan. Easter says the parents can pay interest while the student is in school, or they can capitalize the interest. She says it gives the parents options in managing the loan that they didn’t have in the past.
Easter says those who’re interested in learning more about federal and state resources available in Iowa to help pay college costs should contact the Iowa College Aid’s Information Service Center at 877-272-4456 or visit the Commission’s website .