Skip Navigation
Edvisors Star Logo
Edvisors Logo
  • Compare Lenders
      • Compare Lenders
      • Best Private Student Loans in March 2023
      • Student Loan Comparison: Federal Loans vs Private Loans
      • Parent PLUS Loans vs Private Student Loans
      • How Does Interest on Student Loans Work?
      • Private Student Loan Cosigner: Everything you Need to Know
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Compare Lenders
      • Best Student Loan Refinance Companies for March 2023
      • Federal Student Loan Repayment Plans
      • Student Loan Forgiveness: How to Get Student Loans Forgiven
      • Repayment Plans for Private Student Loans
      • Parent PLUS Loan Forgiveness
      • View All Articles >
      refinance student loans with college ave get started

      This is an advertisement.

    • Private Student Loans
    • Refinance Student Loans
  • Plan for College
      • Best Job Search Sites
      • Resumes That Get Noticed
      • High Paying Careers
      • STEM Careers
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Measuring Academic Fit: Reach, Match and Safety Schools
      • Need-Blind Admissions
      • How Long is a College Essay
      • When are College Applications Due
      • How to Write a Good College Essay
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA Deadlines for 2023-2024
      • FAFSA FAQ - Your FAFSA Questions Answered
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Most Popular Scholarships for College Students in 2023
      • Apply for Free Scholarships for College
      • College Scholarships for Kids
      • Most Prestigious Undergraduate Scholarships
      • Las mejores becas para estudiantes hispanos y latinos
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Pay for College
      • Tuition Payment Plans
      • Pros and Cons: Borrowing From My 401K to Pay for College
      • Paying College Tuition with a Credit Card
      • Best Ways to Pay for College Without Financial Aid
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Financial Aid Disbursement: When and How You Will Get It
      • Should I Pay Off My Student Loans Right Now
      • How to Minimize Student Loan Debt
      • View All Articles >
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

    • Careers
    • College Admissions
    • FAFSA
    • Scholarships
    • Paying for College
    • Student LIFE Blog
  • Student Loans
      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA FAQ - Your FAFSA Questions Answered
      • FAFSA Deadlines for 2023-2024
      • FAFSA School Codes
      • FAFSA 2023-2024 Guide & Resources
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Best Private Student Loans in March 2023
      • Student Loan Comparison: Federal Loans vs Private Loans
      • Parent PLUS Loans vs Private Student Loans
      • How Does Interest on Student Loans Work?
      • Private Student Loan Cosigner: Everything you Need to Know
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Filing the FAFSA 2023-24: A Simple Guide for Students
      • FAFSA FAQ - Your FAFSA Questions Answered
      • The complete guide to federal undergraduate student loans
      • What are Federal Parent PLUS Loans and How to Apply?
      • Financial Aid for Graduate School
      • Compare Subsidized and Unsubsidized Student Loans
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

      • Best Student Loan Refinance Companies for March 2023
      • Federal Student Loan Repayment Plans
      • Student Loan Forgiveness: How to Get Student Loans Forgiven
      • Repayment Plans for Private Student Loans
      • Should You Refinance Federal Student Loans?
      • Parent PLUS Loan Forgiveness
      • View All Articles >
      • Sallie Mae Student Loan Review
      • College Ave Student Loan Review
      • SoFi Student Loan Review
      • Ascent Student Loan Review
      • View All Articles >
      College ave student loans apply now

      This is an advertisement.

    • FAFSA
    • Private Student Loans
    • Federal Student Loans
    • Repay Student Loans
    • Lender Reviews
  • Credit Cards
      • Petal® 2 Visa® Credit Card Review
      • SoFi Credit Card Review
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Best Credit Cards for 2023
      • Best Cash Back Credit Cards
      • Best 0% Introductory APR Credit Cards
      • Best Secured Credit Cards for 2023
      • Best Balance Transfer Credit Cards
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Build Credit?
      • What Age Can You Get a Credit Card?
      • What is a Secured Credit Card?
      • What is an Unsecured Credit Card?
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

    • Card Reviews
    • Best Credit Cards
    • Credit Card FAQs
  • Money Management
      • Best Budgeting Apps
      • Budgeting Tips
      • Budgeting for Beginners
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • Financial Goals
      • How to Save Money as a College Student
      • What is an Emergency Fund
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Pay Off Debt
      • Debt Relief
      • What is a Debt Management Plan
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • How to Check Your Credit Score
      • Best Credit Building Apps
      • What is Credit?
      Self Credit Builder: Build Credit. Build Savings. Build Dreams.

      Sponsored Ad

      • Investing for Beginners
      • Best Investment Apps
      • Understanding the Stock Market
      Win Scholarships - Join ScholarshipPoints.com

      This is an advertisement.

      • What is Risk Management
      • How to Prevent Identity Theft
      • What is Insurance
      Info compromised in a breach? Don't compromise on identity theft protection.

      Sponsored Ad

    • Budgeting
    • Saving
    • Debt Management
    • Credit
    • Investing
    • Risk Management
Search Box Form
School Search Form
Advertisement Disclosure
Advertisement Disclosure
×

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

×
Get Your Free Guide to Filing the FAFSA Today!

Thank you for your interest in Edvisors' 2020-2021 Guide to Filing the FAFSA.

Please complete the form below to access your free copy.

Thank you! Click here to download your free FAFSA Guide.

I am a:

×
College knowledge starts here!

Enter your email below to receive your Student Loan Handbook from Edvisors.

Please check your email for the Student Loan Handbook.

After Navigation
Home Blog Likely Student Aid Changes in 2015

Likely Student Aid Changes in 2015

Date Published : January 16, 2015
Authored By : Edvisors Network
Share
Email This Article
Fill out the form below to send a copy of this article to your email.
By clicking "Submit" I have read and agree to the Edvisors' Terms of Use and Privacy Policy. We strongly encourage you to read our Privacy Policy to understand how we use and share your information.
A copy of this article has been sent to your email.

The Higher Education Act of 1965 (HEA), the legislation that controls most federal student aid programs, is due for reauthorization in 2015. Major changes to federal student aid programs often occur during reauthorization. As the new chair of the Senate Health, Education, Labor and Pensions committee, Senator Lamar Alexander (R-TN) will control the process. Senator Alexander is a former U.S. Secretary of Education and a former college president. The Higher Education Act will be reauthorized later in the year, after reauthorization of the Elementary and Secondary Education Act (ESEA). Possible themes for the HEA reauthorization will include simplification and streamlining of student aid as well as improved consumer disclosures. A big increase in funding for student aid programs is unlikely.

Senator Alexander has already introduced the Financial Aid Simplification and Transparency Act of 2015 (FAST Act), which will simplify the FAFSA, establish one grant and one loan program for federal student aid, and restore year-round Pell Grants. This legislation has bipartisan support and is co-sponsored by Senator Michael Bennet (D-CO).

The President’s proposal for free community college tuition will remain a proposal, as Congress is unlikely to appropriate new funding or to shift funding from the Federal Pell Grant program and the American Opportunity Tax Credit.

Litigation concerning the U.S. Department of Education’s new gainful employment regulations may end with a court ruling that overturns part of the new regulations on the grounds that they are arbitrary, capricious and vague. The U.S. Department of Education made changes in the new regulations that require graduates of for-profit colleges to have 50 percent greater income than the 2011 version of the regulations. Nevertheless, federal and state agencies will continue to enforce the existing regulations. Some for-profit colleges will transition to non-profit status, following the pattern established by Remington College, Stevens-Henager College, Keiser University, Grand Canyon University and ECMC’s acquisition of Corinthian Colleges.

President Obama’s proposal to expand eligibility for the Pay-As-You-Earn Repayment (PAYE) plan will be implemented by December, but may have be scaled back. The President does not have the power of the purse, so any increase in the cost of PAYE must be covered by savings elsewhere in the student loan program. Given that potential savings are limited, the expansion of eligibility will have to be limited. Accordingly, eligibility for PAYE is unlikely to be extended to all borrowers. The proposal to expand PAYE may be moot, however, if HEA reauthorization replaces all of the repayment plans based on income with a single new income-dependent repayment plan, perhaps in conjunction with mandatory repayment through the payroll withholding system. There will then be only two repayment plans for new borrowers, an income-dependent repayment plan and standard 10-year repayment.

Senator King (Ind-ME), with support from Senator Alexander, has introduced the Repay Act of 2015, to propose a simplified income-driven repayment plan. This will base the monthly loan payment on 10% of discretionary income up to a “bend point” and 15% thereafter for new borrowers. The bend point is initially $25,000 and will be adjusted annual for inflation (CPI-U). The remaining debt will be cancelled after 20 years for borrowers whose initial balance was less than $57,500 (the cumulative Direct Unsubsidized Loan limit for independent undergraduate students) and after 25 years for borrowers with more debt. The loan forgiveness will occur after 10 years for new borrowers as of July 1, 2015 who work full-time in a public service job for the 10-year period, similar to the current public service loan forgiveness program. All three types of loan forgiveness will be tax-free. New borrowers will be limited to a choice between this repayment plan and standard 10-year repayment.

President Obama’s proposal for a new college ratings system will likely be delayed, as the timing is too tight for it to be implemented prior to the July 1, 2015 start of the 2015-2016 academic year. Ultimately, the proposal will be a failure, devolving into a set of minimal performance requirements for colleges to retain institutional eligibility for Title IV federal student aid. Colleges may respond to these new requirements by becoming more selective in their admissions policies, yielding a reduction in the number of college graduates even as graduation rates improve. Implementing an effective college ratings or ranking system is incredibly difficult, as has been demonstrated by commercial rankings such as the ones published by U.S. News & World Report. There is no evidence that the federal government will be able to design a college ratings system that is better than the efforts of commercial entities. The President’s ratings system will be met with opposition from postsecondary institutions and policymakers, and will be ineffective at influencing consumer behavior.

The Consumer Financial Protection Bureau (CFPB) is likely to issue new rules concerning the collection of time-barred debt (i.e., debt for which the statute of limitations has expired). The CFPB and state attorneys general will continue to pursue businesses that charge advance fees to consolidate federal student loans and to obtain other financial relief (something borrowers can do on their own for free).

In response to consumer complaints and criticism by public policy advocacy organizations, the U.S. Department of Education will issue new rules concerning the use of debit cards for disbursing federal student aid funds.

An improving economy and more lenders offering private consolidation loans are likely to reduce the pressure on borrowers and lenders. If the capital markets start thawing, non-bank financial institutions may re-enter the private student loan market. The job market for recent college grads will continue to improve.

Total new federal student loan volume will decrease slightly from 2014, mostly because of a decline in demand due to the improving economy and a decline in total college enrollment. Nevertheless, the students who borrow will continue to borrow more than before. Private student loan volume will grow slightly, since demand exceeds the supply and federal loan limits remain stagnant. Even if the Perkins Loan program ends, it will not have much of an impact, as it represents less than 1% of new loan volume.

Interest rates on new federal student loans are likely to increase by 80 to 120 basis points on July 1, 2015. Although current 10-year Treasury rates are down about 50 basis points compared with last May, the Federal Reserve Board is likely to increase the Federal FUNDS rate in 2015, given unemployment rates remain below 6.0%. The market is likely to anticipate the increase. Also, when the Fed breaks the ice with an increase, the market will assume that it is the beginning of a series of interest rate increases.

Share

About Edvisors

For 20 years we have been known as one of the largest and most trusted resources to help you find your path to success. Everyone needs to find their own path, and we know that first-hand. Helping you reach your educational and financial goals without stress, is our mission. Let's face it, it may be unavoidable to borrow money, but there are ways to do it wisely, including making the right choices up front, as well as during repayment. If we can help you make an informed and careful decision, we consider that a good day in the office.

Find information on this site to help you plan and pay for college as well as manage your money with confidence.

How to Improve College Savings Plans Previous Article Blog Home Launch of New Education Lender May Be a Sign of an Improving Economy Next Article
Could You Be Saving More?
Subscribe to Edvisors' Student LIFE Newsletter to receive up-to-date financial aid information and advice, explore scholarship opportunities, loan repayment options, and learn expert strategies on how to plan and pay for college.
Newsletter Form
By clicking "Subscribe" I have read and agree to the Edvisors' Terms of Use and Privacy Policy. We strongly encourage you to read our Privacy Policy to understand how we use and share your information.
Thank you for subscribing to our newsletter.
We care about your privacy

This website uses cookies to offer you the most relevant marketing and targeted advertisements.  These cookies can collect information to personalize your experience and in some states are considered a sale of your personal information. You may exercise your right to opt out by clicking on deny cookies.  If you opt out, we or our partners will not be able to provide you with personalized ads and we will not provide your personal information to any third parties.   Please accept cookies for the optimal experience.  You can withdraw or modify your consent for non-essential cookies at any time by visiting Cookie Preference page.

Ask the Edvisor
Blog
Contact Us
Edvisors in the News
Link to Us
Newsletter
Partners
Press
Student Aid FAQ
Testimonials
Tools and Calculators
About Edvisors
Video Resources
Financial Terms Glossary
Accessibility Statement
Sitemap
Disclaimer
Notice of Collection
Interest-Based Ads
Cookie Settings
Privacy
Terms of Use
Your Opt-out Rights
Your Privacy Choices Privacy Options

Better Business Bureau logo

Edvisors provides expert advice on planning and paying for college. On Edvisors.com easily compare student loan lenders, learn how to apply for financial aid, and discover scholarships. Learn about federal and private student loans for students and parents, how and when to apply to college, and more!

Edvisors (“Edvisors Network, Inc.”) provides independent advertising-supported platforms for consumers to search compare and apply for private student loans. Loan offers from participating lenders that appear on our websites are not affiliated with any college and/or universities, and there are no colleges and/or universities which endorse Edvisors’ products or services. Lender search results do not constitute an official college preferred lender list. Edvisors receives compensation from lenders that appear on this site. This compensation may impact the placement of where lenders appear on this site, for example, the order in which the lenders appear when included in a list. Not all lenders participate in our sites and lenders that do participate may not offer loans to every school.

Edvisors is not a lender and makes no representations or warranties about your eligibility for a particular loan or financial aid. Lenders are solely responsible for any and all credit decisions, loan approval and rates, terms and other costs of the loan offered and may vary based upon the lender you select. Please check with your school or lender directly for information related to your personal eligibility.

Edvisors has endeavored to provide accurate information. However, the results provided by lenders are for illustrative purposes only and accuracy is not guaranteed, as such, Edvisors assumes no responsibility for errors or omission in the information provided.

Copyright © 1998-2023 by Edvisors Network, Inc. All rights reserved.

All other trademarks and service marks displayed on Edvisors Network, Inc. websites are the property of their respective owners.

Edvisors Network, Inc. 350 S. Rampart Blvd, Suite 200, Las Vegas, NV 89145

Copyright © 2023 by Edvisors.com. All rights reserved.

×
You Got In - Now How Do You Pay for It?

Get the money you need from leading lenders

1 Pick Your College
2 View Your Options
3 Click to Apply
Exit Modal

PrivateStudentLoans.com recommends you consider all financial aid alternatives including grants, scholarships and federal loans (Federal Stafford, Federal Parent PLUS, Federal Grad PLUS) prior to applying for private student loans.