Borrower benefits may become a thing of the past for many lenders. According to the Wall Street Journal, lenders that deal in federal loans are scaling back benefits, thanks to the recent legislation signed by the president that went into effect on October 1, 2007. “Banks and other lenders who issue federal student loans have begun to scale back a host of borrower discounts after a new law took effect yesterday that cuts federal payments to the lending institutions,” reports the Wall Street Journal. “Lenders have long used discounts to compete for borrowers of federal student loans, including Stafford, PLUS loans taken out by parents of undergraduates or by graduate students themselves, and federal consolidation loans,” says the article.
If you’re a med student about to enter residency, this law could have big repercussions for you – read how the new changes are affecting economic hardship deferment.