Latest news with #studentLoans
The Independent
03-07-2025
- Business
- The Independent
Grad student loans could soon be capped. Here's what that could mean for you
The House of Representatives moving the GOP 's 'Big Beautiful Bill' closer to President Donald Trump's signing brings graduate students nearer to facing unprecedented limits on funding higher education. While critics argue that the spending bill would disproportionately block marginalized communities from pursuing advanced degrees, Republicans say the limits will help control college costs by reducing incentives for schools to raise tuition. Starting next summer, the bill will affect borrowers taking out loans and those stuck on the Biden -era SAVE plan, potentially causing monthly payments to increase by hundreds of dollars, according to the Student Borrower Protection Center. What are the proposals? The 'big beautiful bill' proposes significant changes to how graduate and professional students finance their education. One of the biggest changes would be the elimination of the federal Grad PLUS loan program beginning in July 2026, which currently allows students to borrow up to the full cost of attendance for graduate programs. In its place, the bill raises annual and lifetime limits on federal Stafford loans, but these new caps may not be enough to cover further education for students. Graduate students would be limited to borrowing up to $20,500 annually, with a lifetime cap of $100,000, while professional students, such as those in medical or law school, could borrow up to $50,000 per year, with a $200,000 lifetime maximum. What impacts could the proposals have? The proposal could force students to rely on private loans with less favorable terms, delay or abandon plans for graduate education, or choose less expensive programs that may not align with their career goals. Experts warn this could worsen shortages in high-demand fields, particularly in rural healthcare, where access to graduate-trained professionals is already limited. What's happened to student loans so far? Recent student loan policy changes include the restart of loan payments following a pandemic pause, modifications to income-driven repayment plans, and ongoing legal battles over loan forgiveness programs. In June 2023, the Supreme Court struck down the Biden administration's plan to cancel up to $400 billion in student loans, and a court order continues to block its new income-driven repayment program. Meanwhile, the US Department of Education has resumed collecting on defaulted federal student loans. What's next? White House Press Secretary Karoline Leavitt announced Thursday that President Trump is scheduled to sign the "big, beautiful bill" on Friday at 5 p.m. EST.
Yahoo
03-07-2025
- Business
- Yahoo
4 Ways Trump's ‘Big, Beautiful Bill' Will Make College More Expensive
President Donald Trump's 'Big Beautiful Bill' could reshape how millions of Americans pay for college. Among its most controversial changes are deep cuts to Pell Grants, the elimination of subsidized student loans, and the introduction of lifetime borrowing caps for both students and parents — primary pathways that make college more affordable for individuals and families. Be Aware: Read Next: While the changes are designed to reduce federal spending, here are four ways Trump's 'Big Beautiful Bill' will make college more expensive. The bill proposes slashing the maximum Pell Grant award by nearly 23%, dropping it from $7,395 to $5,710 starting in the 2026 to 2027 school year. That's nearly $1,700 less per year that low-income students can use to cover tuition, fees and living costs, leaving families to either borrow more or pay out of pocket. It also makes Pell Grants harder to qualify for. The required course load would jump from 24 to 30 credits per year, meaning students would have to take 15 credit hours per semester to receive the full award. Students enrolled less than half-time would lose access altogether. Find Out: Experts said these changes could disproportionately affect part-time students, working students and community college students, who often balance jobs and caregiving responsibilities with school. 'Increasing the credit hour requirement from 12 to 15 for Pell Grant eligibility will affect 25% or more of students at community colleges and technical schools,' said Tom O'Hare, a college planning coach at Get College Going. 'Extending the credit hours will lower access to financing resources, resulting in an extended timeline to complete their programs, a double financial hit for a family or individual.' The bill would impose lifetime borrowing caps on federal student loans: $50,000 for undergraduate students, $100,000 for graduate students and up to $150,000 for professional students, such as those in law or medical school. These caps mean that students who reach the limit before completing their degrees will be forced to turn to private loans, which often come with higher interest rates, fewer repayment protections and less flexibility than federal loans. The House and Senate versions differ slightly. The House would cap graduate borrowing at $100,000 total (or $150,000 for professional degrees). At the same time, the Senate allows a higher cap of $200,000 for professional programs but maintains the current undergraduate caps ($31,000 for dependent students and $57,500 for independent students). 'Families would need to look outside direct loan options, which could mean more borrowing in the private market,' said Jonathan Sparling, a director at CollegeWell, an educational platform that helps families plan and save for college. According to the U.S. Department of Education, 'private student loans can have variable or fixed interest rates, which may be higher or lower than the rates on federal loans depending on your circumstances.' The bill proposes eliminating subsidized federal loans for undergraduates, a key benefit that currently keeps borrowing costs lower. Right now, subsidized loans don't accrue interest while a student is in school, during grace periods, or in deferment, effectively saving borrowers hundreds or even thousands of dollars. 'In practical terms, the elimination of the interest subsidy would mean immediate accrual of interest after loan disbursement, adding to total costs,' Sparling said. This would directly increase the total amount students owe over the life of the loan. In addition, without this subsidy, students would leave school owing more than they do now before even making their first payment. The legislation would scrap current repayment options and replace them with just two: A standard fixed-payment plan and a new income-driven plan called the Repayment Assistance Plan (RAP). Under RAP, borrowers would pay 1% to 10% of their income, with a minimum monthly payment of $10. While this may lower monthly payments for some, it extends the repayment timeline: Loan forgiveness wouldn't kick in until after 30 years of payments, compared to 20 or 25 years under many current plans. Dan Rubin, CEO of Yelo Funding, said income-driven repayment plans like SAVE (Saving on a Valuable Education) and PAYE (Pay As You Earn) have allowed millions of borrowers to manage their loan repayments. Getting rid of those options may negatively affect how people fund their education. 'Ending those options would remove the only federal safeguard that adjusts repayment to earnings,' Rubin said. 'Faced with the prospect of higher debt and fewer repayment protections, many students will be forced to delay, forgo or abandon their graduate studies altogether.' Editor's note: An earlier version of this post included a quote noting eliminating income-driven repayment plans allowed borrowers to manage their repayments. It's been updated to state how these plans benefit borrowers and the impact if they're eliminated with upcoming legislation. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 These Cars May Seem Expensive, but They Rarely Need Repairs Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why This article originally appeared on 4 Ways Trump's 'Big, Beautiful Bill' Will Make College More Expensive Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-07-2025
- Business
- Yahoo
4 Ways Trump's ‘Big, Beautiful Bill' Will Make College More Expensive
President Donald Trump's 'Big Beautiful Bill' could reshape how millions of Americans pay for college. Among its most controversial changes are deep cuts to Pell Grants, the elimination of subsidized student loans, and the introduction of lifetime borrowing caps for both students and parents — primary pathways that make college more affordable for individuals and families. Be Aware: Read Next: While the changes are designed to reduce federal spending, here are four ways Trump's 'Big Beautiful Bill' will make college more expensive. The bill proposes slashing the maximum Pell Grant award by nearly 23%, dropping it from $7,395 to $5,710 starting in the 2026 to 2027 school year. That's nearly $1,700 less per year that low-income students can use to cover tuition, fees and living costs, leaving families to either borrow more or pay out of pocket. It also makes Pell Grants harder to qualify for. The required course load would jump from 24 to 30 credits per year, meaning students would have to take 15 credit hours per semester to receive the full award. Students enrolled less than half-time would lose access altogether. Find Out: Experts said these changes could disproportionately affect part-time students, working students and community college students, who often balance jobs and caregiving responsibilities with school. 'Increasing the credit hour requirement from 12 to 15 for Pell Grant eligibility will affect 25% or more of students at community colleges and technical schools,' said Tom O'Hare, a college planning coach at Get College Going. 'Extending the credit hours will lower access to financing resources, resulting in an extended timeline to complete their programs, a double financial hit for a family or individual.' The bill would impose lifetime borrowing caps on federal student loans: $50,000 for undergraduate students, $100,000 for graduate students and up to $150,000 for professional students, such as those in law or medical school. These caps mean that students who reach the limit before completing their degrees will be forced to turn to private loans, which often come with higher interest rates, fewer repayment protections and less flexibility than federal loans. The House and Senate versions differ slightly. The House would cap graduate borrowing at $100,000 total (or $150,000 for professional degrees). At the same time, the Senate allows a higher cap of $200,000 for professional programs but maintains the current undergraduate caps ($31,000 for dependent students and $57,500 for independent students). 'Families would need to look outside direct loan options, which could mean more borrowing in the private market,' said Jonathan Sparling, a director at CollegeWell, an educational platform that helps families plan and save for college. According to the U.S. Department of Education, 'private student loans can have variable or fixed interest rates, which may be higher or lower than the rates on federal loans depending on your circumstances.' The bill proposes eliminating subsidized federal loans for undergraduates, a key benefit that currently keeps borrowing costs lower. Right now, subsidized loans don't accrue interest while a student is in school, during grace periods, or in deferment, effectively saving borrowers hundreds or even thousands of dollars. 'In practical terms, the elimination of the interest subsidy would mean immediate accrual of interest after loan disbursement, adding to total costs,' Sparling said. This would directly increase the total amount students owe over the life of the loan. In addition, without this subsidy, students would leave school owing more than they do now before even making their first payment. The legislation would scrap current repayment options and replace them with just two: A standard fixed-payment plan and a new income-driven plan called the Repayment Assistance Plan (RAP). Under RAP, borrowers would pay 1% to 10% of their income, with a minimum monthly payment of $10. While this may lower monthly payments for some, it extends the repayment timeline: Loan forgiveness wouldn't kick in until after 30 years of payments, compared to 20 or 25 years under many current plans. Dan Rubin, CEO of Yelo Funding, said income-driven repayment plans like SAVE (Saving on a Valuable Education) and PAYE (Pay As You Earn) have allowed millions of borrowers to manage their loan repayments. Getting rid of those options may negatively affect how people fund their education. 'Ending those options would remove the only federal safeguard that adjusts repayment to earnings,' Rubin said. 'Faced with the prospect of higher debt and fewer repayment protections, many students will be forced to delay, forgo or abandon their graduate studies altogether.' Editor's note: An earlier version of this post included a quote noting eliminating income-driven repayment plans allowed borrowers to manage their repayments. It's been updated to state how these plans benefit borrowers and the impact if they're eliminated with upcoming legislation. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 4 Affordable Car Brands You Won't Regret Buying in 2025 How Much Money Is Needed To Be Considered Middle Class in Your State? This article originally appeared on 4 Ways Trump's 'Big, Beautiful Bill' Will Make College More Expensive Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-07-2025
- Business
- Yahoo
4 Ways Trump's ‘Big, Beautiful Bill' Will Make College More Expensive
President Donald Trump's 'Big Beautiful Bill' could reshape how millions of Americans pay for college. Among its most controversial changes are deep cuts to Pell Grants, the elimination of subsidized student loans, and the introduction of lifetime borrowing caps for both students and parents — primary pathways that make college more affordable for individuals and families. Be Aware: Read Next: While the changes are designed to reduce federal spending, here are four ways Trump's 'Big Beautiful Bill' will make college more expensive. The bill proposes slashing the maximum Pell Grant award by nearly 23%, dropping it from $7,395 to $5,710 starting in the 2026 to 2027 school year. That's nearly $1,700 less per year that low-income students can use to cover tuition, fees and living costs, leaving families to either borrow more or pay out of pocket. It also makes Pell Grants harder to qualify for. The required course load would jump from 24 to 30 credits per year, meaning students would have to take 15 credit hours per semester to receive the full award. Students enrolled less than half-time would lose access altogether. Find Out: Experts said these changes could disproportionately affect part-time students, working students and community college students, who often balance jobs and caregiving responsibilities with school. 'Increasing the credit hour requirement from 12 to 15 for Pell Grant eligibility will affect 25% or more of students at community colleges and technical schools,' said Tom O'Hare, a college planning coach at Get College Going. 'Extending the credit hours will lower access to financing resources, resulting in an extended timeline to complete their programs, a double financial hit for a family or individual.' The bill would impose lifetime borrowing caps on federal student loans: $50,000 for undergraduate students, $100,000 for graduate students and up to $150,000 for professional students, such as those in law or medical school. These caps mean that students who reach the limit before completing their degrees will be forced to turn to private loans, which often come with higher interest rates, fewer repayment protections and less flexibility than federal loans. The House and Senate versions differ slightly. The House would cap graduate borrowing at $100,000 total (or $150,000 for professional degrees). At the same time, the Senate allows a higher cap of $200,000 for professional programs but maintains the current undergraduate caps ($31,000 for dependent students and $57,500 for independent students). 'Families would need to look outside direct loan options, which could mean more borrowing in the private market,' said Jonathan Sparling, a director at CollegeWell, an educational platform that helps families plan and save for college. According to the U.S. Department of Education, 'private student loans can have variable or fixed interest rates, which may be higher or lower than the rates on federal loans depending on your circumstances.' The bill proposes eliminating subsidized federal loans for undergraduates, a key benefit that currently keeps borrowing costs lower. Right now, subsidized loans don't accrue interest while a student is in school, during grace periods, or in deferment, effectively saving borrowers hundreds or even thousands of dollars. 'In practical terms, the elimination of the interest subsidy would mean immediate accrual of interest after loan disbursement, adding to total costs,' Sparling said. This would directly increase the total amount students owe over the life of the loan. In addition, without this subsidy, students would leave school owing more than they do now before even making their first payment. The legislation would scrap current repayment options and replace them with just two: A standard fixed-payment plan and a new income-driven plan called the Repayment Assistance Plan (RAP). Under RAP, borrowers would pay 1% to 10% of their income, with a minimum monthly payment of $10. While this may lower monthly payments for some, it extends the repayment timeline: Loan forgiveness wouldn't kick in until after 30 years of payments, compared to 20 or 25 years under many current plans. Dan Rubin, CEO of Yelo Funding, said eliminating some income-driven repayment plans like SAVE (Saving on a Valuable Education) and PAYE (Pay As You Earn) have allowed millions of borrowers to manage their loan repayments. 'Ending those options would remove the only federal safeguard that adjusts repayment to earnings,' Rubin said. 'Faced with the prospect of higher debt and fewer repayment protections, many students will be forced to delay, forgo or abandon their graduate studies altogether.' More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 6 Big Shakeups Coming to Social Security in 2025 9 Downsizing Tips for the Middle Class To Save on Monthly Expenses This article originally appeared on 4 Ways Trump's 'Big, Beautiful Bill' Will Make College More Expensive
Yahoo
21-06-2025
- Business
- Yahoo
What's the best age to buy a house?
Buying a home is one of the biggest financial decisions you'll ever make. So, you may be wondering: What is the best age to buy a house? Are you too young to think about homeownership? Or do you feel like you've waited too long to buy? Here's a look at the average age of first-time home buyers and how to decide the right age to make a move. Learn more: A step-by-step guide to buying a house This embedded content is not available in your region. In this article: Average age to buy a house Pros and cons of buying when younger Pros and cons of buying when older Is there a 'right time' (or age) to buy? FAQs Young adults are now waiting longer to buy their first homes. In 2024, the average age for Americans to buy their first house reached a record high of 38, according to a report from the National Association of REALTORS®. The shift is largely due to soaring home prices and student loan debt levels. Many young adults are also delaying marriage and prioritizing personal growth and career development over homeownership. That said, the right age to buy a home may vary depending on your financial situation, desired location, lifestyle, and long-term goals. Building equity. Buying early and owning your own home for an extended period gives you time to build up equity. Your home equity is the difference between what your home is worth and the amount you still owe on your mortgage. You can leverage home equity to invest or meet other financial goals in the future, and even use it to afford a down payment on your next house if you move. However, you don't accumulate equity when you rent. Predictable housing costs. Annual rent increases are relatively common. But when you purchase a home with a fixed-rate mortgage, you get set monthly mortgage payments. (Note: Property taxes, homeowners insurance, and homeowners' association fees, if applicable, may fluctuate over time.) Tax perks. You can save at tax time by deducting mortgage interest, property taxes, and other home costs on your return. Homeowners who itemize deductions can take advantage of this perk. Reach out to a tax professional to learn more. Freedom of expression. Most landlords impose restrictions on the customizations you can make to rental properties. Owning a home, though, means you can renovate or upgrade your space to make it more functional. Lower price point. Home prices generally rise over time. So, buying young means you can take advantage of the lower price point. Plus, if you stay in the house for a long time, you could pay off your home loan before you retire. Limited mobility. Leasing means you only have to stay put for a year (or less in some cases) before you can relocate. But buying a home is more of a long-term investment, and selling too prematurely could be costly. Lending terms. There are loan programs for people with low or no credit scores or those with limited income, minimal cash reserves, or high debt levels. The problem is, you may not qualify for the best lending terms offered to prospective buyers. Specifically, you could get stuck paying a higher mortgage stability. Buying in your middle or older years gives you more time to build a solid financial foundation. Remember, good credit, ample reserves, and a low debt-to-income ratio make you more attractive to lenders. More clarity. It's also highly likely that you'll have more clarity on where you want to live long term when you're older. Whether you're retiring in your dream area or relocating to be closer to adult children, buying a home later in life can bring peace of mind. You'll have confidence knowing you're living exactly where you want to be. Forfeited equity growth. Again, buying young can work in your favor as home values climb. But buying older gives you less time to build up equity that you can convert to cash to use however you see fit. Mortgage payments during retirement. Some homeowners experience a significant dip in income during their golden years. Unfortunately, costly mortgage payments could stretch your budget thin. Uncertainty. There's no way to know what the future holds. You could face medical challenges or other unexpected obstacles as you age that make it difficult for you to afford or maintain your dream home. The right time to buy a home isn't always about age. It's more about your financial situation, future plans, and ability to manage homeownership costs. Here are some questions to ponder: Do you meet the lending criteria for a mortgage? Do you have a minimal debt load? Can you afford to make a down payment on a new home? Do you have at least three to six months of expenses saved for emergencies? Can you comfortably afford the monthly mortgage payments? Do you plan to live in the home for an extended period of time? Do you have the means to cover maintenance and repairs? Do you have a designated point of contact to assist with questions or address your needs? Answering yes to most of these questions is a sign that you're ready to buy a home, regardless of your age. Before moving forward, analyze your situation, needs, and goals to make an informed decision. Dig deeper: Should you buy a house? How to know if you're ready. A 2024 National Association of REALTORS® report revealed that the average age of first-time home buyers is 38. However, depending on your financial situation and goals, the right age for you could be much younger or older. Again, there's no right or wrong age to purchase a home, as it depends on your unique situation. However, most states require you to be at least 18 unless an adult signs real estate contracts on your behalf. If you're financially stable with a solid credit profile, adequate savings, and a clear vision for your future, homeownership in your 20s could be a smart financial move. You'll have several years to build equity, benefit from predictable housing costs, and even enjoy a paid-off home before retirement should you purchase your 'forever home.' Laura Grace Tarpley edited this article.
