Federal Direct Student Loan Program
Encyclopedia
The William D. Ford Federal Direct Loan Program (also called FDLP, FDSLP, and Direct Loan Program) provides "low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education
... rather than a bank or other financial institution."
Following the passage of the Health Education Reconciliation Act of 2010, the Federal Direct Loan Program is the sole government-backed loan program in the United States.
, but Bush promised to veto it. Candidate Bill Clinton
promised that he would sign such legislation into law if elected, and the Direct Loan program was one of the first laws he signed in 1993.
Funding for the Federal Direct Student Loan Program has decreased from just over $7 billion in 2006 to $509 million budgeted for 2008.
Democrats have made more student-favorable Direct Loan terms part of their platform. Under Obama's new budget, all new loan originations will be under the Direct Loan program by July 2010, netting $6B in annual savings. The bill approving the measure passed the House of Representatives on September 17, 2009. The switch to 100% Direct Lending effective July 1, 2010 was enacted by the Health Care and Education Reconciliation Act of 2010
.
In comparison, other countries have also experimented with government-sponsored loan programs. New Zealand, for instance, now offers 0% interest loans to students who live in New Zealand for 183 or more consecutive days (retroactive for all former students who had government loans), who can repay their loans based on their income after they graduate. This program was a Labour Party promise in the 2005 general election.
Today
Student loans are reaching a whopping $1 trillion dollars. President Obama has proposed the "Pay as You Earn" plan, which helps students and grads in debt to pay what they can according to their income. After 20 years, the balance will be forgiven. Not only that, but the President says he plans on making it easier for students by helping them consolidate their loans into one place, which could drastically improve interest rates [citation needed].
United States Department of Education
The United States Department of Education, also referred to as ED or the ED for Education Department, is a Cabinet-level department of the United States government...
... rather than a bank or other financial institution."
Following the passage of the Health Education Reconciliation Act of 2010, the Federal Direct Loan Program is the sole government-backed loan program in the United States.
Political history of the program
Congress passed a version of the Direct Loan program under President George H. W. BushGeorge H. W. Bush
George Herbert Walker Bush is an American politician who served as the 41st President of the United States . He had previously served as the 43rd Vice President of the United States , a congressman, an ambassador, and Director of Central Intelligence.Bush was born in Milton, Massachusetts, to...
, but Bush promised to veto it. Candidate Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
promised that he would sign such legislation into law if elected, and the Direct Loan program was one of the first laws he signed in 1993.
Funding for the Federal Direct Student Loan Program has decreased from just over $7 billion in 2006 to $509 million budgeted for 2008.
Democrats have made more student-favorable Direct Loan terms part of their platform. Under Obama's new budget, all new loan originations will be under the Direct Loan program by July 2010, netting $6B in annual savings. The bill approving the measure passed the House of Representatives on September 17, 2009. The switch to 100% Direct Lending effective July 1, 2010 was enacted by the Health Care and Education Reconciliation Act of 2010
Health Care and Education Reconciliation Act of 2010
The Health Care and Education Reconciliation Act of 2010 is a law that was enacted by the 111th United States Congress, by means of the reconciliation process, in order to amend the Patient Protection and Affordable Care Act...
.
In comparison, other countries have also experimented with government-sponsored loan programs. New Zealand, for instance, now offers 0% interest loans to students who live in New Zealand for 183 or more consecutive days (retroactive for all former students who had government loans), who can repay their loans based on their income after they graduate. This program was a Labour Party promise in the 2005 general election.
Today
Student loans are reaching a whopping $1 trillion dollars. President Obama has proposed the "Pay as You Earn" plan, which helps students and grads in debt to pay what they can according to their income. After 20 years, the balance will be forgiven. Not only that, but the President says he plans on making it easier for students by helping them consolidate their loans into one place, which could drastically improve interest rates [citation needed].
External links
- U.S. Dept. of Education: Direct Loans
- http://www.gpoaccess.gov/usbudget/fy09/pdf/budget/education.pdf
- http://www.cbsnews.com/8301-503544_162-20126172-503544/who-will-benefit-from-obamas-student-loan-plan/
- http://www.good.is/post/what-do-obama-s-student-loan-reforms-mean-for-you/