Beginning in 2010-2011, all new student loans will be originated through the direct student loan program.
Five years ago, rates for the popular student loan program were lowered to 3.4% from 6.8%.
Because of you, we have ended taxpayer subsidies that were going to banks under the student loan program.
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In 1988, Congress renamed the Federal Guaranteed Student Loan program the Robert T.
They were serving as middlemen in the student loan program -- some of you may have heard about this.
They were taking billions of dollars out of the student loan program.
"Right now, the subsidies in the government-guaranteed student loan program are set by the Congress through the political process, " the budget document read.
Since then, the federal student loan program has exploded, growing at an inflation-adjusted compound annual (real) rate of 7.7 percent between 1978-79 and 2009-10.
We reconfigured the student loan program to eliminate wasteful subsidies to banks and put students' needs first, increasing financial aid for millions of young people.
So even though the loans were guaranteed by the federal government, we were still paying banks billions of dollars to be pass-throughs for the student loan program.
The student loan program is an albatross around academic necks.
One of the things that we did during the last two and a half years -- it used to be the student loan program was run through the banks.
Before I took office, we had a student loan system where tens of billions of taxpayer dollars were going to subsidize banks in the student loan program instead of going to students.
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However, it said it do not support the size of the subsidy cuts to the student loan program contained in various legislative proposals, including HR 2669, which passed the U.S. House of Representatives on July 11.
For years we had a system in which the student loan program went through banks and financial intermediaries who would take a fee, even though they were taking no risk, because these were all federally guaranteed loans.
His student loan program will allow students for the first time ever to borrow money at low cost from the federal government and pay it back as a low fixed percentage of income for up to 20 years.
So millions of students are already paying less for college because of what we did. (Applause.) We took on a system that was wasting billions of taxpayer dollars using banks and lenders as middlemen for the student loan program, and we said why do we need the middlemen?
As part of a higher education package that we passed last year, what we were able to do was to take away subsidies that were going to banks for serving as middlemen in the student loan program and funnel that to help young people, through Pell Grants and lower rates on student loans.
So my administration has tried to do our part by making sure that the student loan program puts students before banks, by increasing aid like the Pell grants for millions of students and their families, and by allowing students to cap their monthly loan payments at 10 percent of their income, which means that their repayment schedule is manageable.
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Even as we put more money into the Student Loan Program, we are also trying to reach out to university presidents and administrators to figure out how can we reduce the inflation in higher education -- because the fact is, is that the only thing that has gone up faster in cost than health care is -- guess what.
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The private sector, she wrote, has been more "responsive" to Dillard's needs than the government's own direct student-loan program.
While the debate continues, most financial planners and academic experts are preparing for some changes in this federal student-loan program, which was used by 7.4 million undergraduate students enrolled last year.
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The legislation would also allow the Department of Education to buy up some student loans made under the Federal Family Education Loan program.
America's Student Loan Providers (ASLP), a group that represents loan providers under the federally guaranteed program, estimates that the bill will cut funding for guaranteed loans by about 80%, forcing borrowers into Direct Loans, which typically have slightly higher interest rates.
The fourth thing is we're going to be strengthening the income-based repayment program for student loans -- fancy way of saying a lot of kids and families graduate with significant loan responsibility and literally -- literally are left with very few options.
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