Leading student loan debt consolidation company, Academic Financial Solutions, weighs in on the ramifications of the new College Cost Reduction and Access Act.
Tampa, FL (PRWEB) October 9, 2007 -- Academic Financial Solutions, a leading student loan debt consolidation company based in Tampa, Florida, evaluates the repercussions of the new College Cost Reduction and Access Act that President Bush signed into law on September 27.
Michael Babb, President of Academic Financial Solutions believes the new law will alter the entire landscape of the college student loan industry. Federal subsidies to private student loan companies will likely be reduced while the number of federal grants increases. The new legislation states that student loan interest rates will gradually be reduced to 3.4 percent on federally subsidized student loans for low-income students over a five-year period.
The Act makes college student loan payments more manageable for borrowers by guaranteeing that they will not have to pay more than 15 percent of their discretionary income in loan repayments. Also, borrowers that experience economic hardship may have their loans forgiven after 25 years.
It is estimated that the new college student loan legislation will eliminate 80 percent of student loan companies’ subsidies over the next five years. This would result in significant losses in student loan benefits for students, thus making it more expensive for students who have already graduated.
“The reality of the situation is that a vast majority of students will no longer be offered interest rate reductions for on-time payments and other attractive incentives by the lenders,” stated Michael Babb. “Even the larger lending institutions will be affected because it virtually wipes out their profit margins. You can’t operate a lender-based program without a fair and realistic profit margin.”
“The important thing to remember is what is in the student and borrower’s best interests,” Babb continued. “With college costs increasing almost 40% over the past five years, educational funding resources need to increase as well. Hopefully, this student loan legislation will help keep pace with this demand.”
From its inception, Academic Financial Solutions established a reputation of serving the best interests of students and borrowers and has saved FFELP borrowers millions of dollars by reducing their college student loan payments through consolidation. For more information on student loan debt consolidation, call toll-free, 1-866-523-1474 or visit www.AcademicFinancial.com.
For more information, contact:
David Atkinson
Academic Financial Solutions
813-830-7906 x224
david.atkinson @ academicfinancial.com
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