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Students feeling the pain of sequester cuts from fee hikes on there federal loans

March 15, 2013

The effects of the sequester have spread to the hallowed halls of education.

Both graduate students and the parents of undergrads have been slowly receiving letters from the federal Department of Education. The letters say the fees on their Direct PLUS loans from the government are being raised as a direct result of the automatic budget cuts that kicked in this month because Congress and the White House couldn’t come to a fiscal agreement.

“On August 2, 2011, Congress passed the Budget Control Act of 2011, which put into place automatic federal budget cuts, known as the ‘sequester.’ While this law does not otherwise change the amount or terms or conditions of your Direct Loan, it does raise loan fees on Direct PLUS Loans first disbursed after March 1, 2013 states the letter we received. 

“Specifically, the fee on your loan will increase from 4.0 percent of your loan amount to 4.204 percent. For example, the fee on a $10,000 PLUS loan will increase by $20.40 from $400.00 to $420.40,” the letter continues.

While the increase is slight, many families will still have to tighten belts on already strained budgets. If you or someone you know needs help consolidating and lowering there student loan debt payments than contact Nation Wide Consumer Debt Relief. We specialize in student loan consolidation. Call 877-282-7587 or go to http://www.nwcdr.com/student-loan-consolidation/ 

 

 

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