Mr. President has signed the Deficit Reduction Act for this year. DRA aims at reducing fiscal deficit of federal governments. This year govt. has shown their concern for students from lower income group, patients, and retirees mainly.
It is quite true that unless you stop overspending, you cannot fill the deficit on your funds. As per as fund for student aid in concerned, subsidies payable to banks and lenders, insurance coverage for lenders against default are going to be reduced. A move is expected towards steady rate of interest on student loan too. Overall this act is going to lock the loopholes that have been helping lenders to claim more fees from students so far.
The advantages students going to enjoy include lower loan fee, higher loan limit and increased grant aid for students from lower income group. Maximum benefit will be awarded to those studying Science, Mathematics or Tech subjects. It will do well for borrowers who are engaged in teaching.
However, the rate of interest for student loans and that of consolidation loan is likely to increase once this act becomes effective on July 1, 2006. Students will have more funds available but might have to pay more towards interest. That is the reason more and more students are enrolling in consolidation program to lock the interest at a lower rate.
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