New Federal Student Loan Terms

New federal student loan terms took effect on Tuesday. The changes that took effect in the federal student aid program will lessen interest rates for some students while increasing the amount they can borrow. The interest rate on new, subsidized Stafford loans to undergraduates was among the biggest changes. It drops from 6.8 percent to 6 percent. These loans are awarded to lower-income students and the government picks up interest payments while students are still in school. As part of congressional measures approved last year to increase student aid, the rates are slated to continue to decline in stages over the next five years. Congress also approved $2000 per year increases in what students can borrow from unsubsidized Stafford loans.