The end of federally backed private loans? Re: GradPlus?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
DanInALionsDen
Posts: 296
Joined: Tue Oct 13, 2009 1:00 am

The end of federally backed private loans? Re: GradPlus?

Postby DanInALionsDen » Sat Mar 20, 2010 11:04 am

CNN.com posted an article today discussing the 19 billion dollar budget gap in the Pell grant program. The article explains that: "The Obama administration's funding solution now before Congress is part of a proposal to end federal subsidies to private lenders that make federally-backed student loans."

Will this impact GradPlus loans?

Here's the link:

http://money.cnn.com/2010/03/20/news/ec ... ts/?hpt=P1

smalltown
Posts: 82
Joined: Sat Aug 16, 2008 1:51 pm

Re: The end of federally backed private loans? Re: GradPlus?

Postby smalltown » Sat Mar 20, 2010 11:29 am

No, this has been part of the administration's proposal for a while. What the story means is that the government would stop giving the federally backed money to banks and just give out the money itself. Some schools get their federally backed loans from banks, which can earn money on the fees. Other schools, like mine, get it straight from the government. So what this plan would do would keep the fees for the government, and thus the loan program, and not give the free money to the banks. So the loans are safe. The money given to banks is not.




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