No More Private Loans?

[gazelle]

Forgive me, I've been living quite isolated in rural Japan and just haven't kept up with things.

Is it true that with the new Obama bill, there are no more private loans/lenders (Sallie Mae, etc.)?

Are they then going to abolish the $24.5k federal annual loan cap?

[Falmouth]

What does the one have to do with the other ? Stafford loans of both types will only be thru the govt. Private loans will still be available. I haven't heard if the max loan per year in school for the federal will change.

[gazelle]

What does the one have to do with the other ? Stafford loans of both types will only be thru the govt. Private loans will still be available. I haven't heard if the max loan per year in school for the federal will change.

I guess my concern was that if I'm trying to borrow over $100k for two years and there's a federal cap of $24.5k/year, I'd be out a chance to go to grad school.

[pea-jay]

You're probably looking at PLUS loans then. The 24K limit only applies to direct loans. My package (with PLUS) was twice that for NYU. So, no you are not limited, at least by that ceiling. Now getting a PLUS loan...I dont know if you automatically can do that or is it based on a credit check and what not.

[tem11]

There are still private loans. The new law means that FEDERAL loans are now processed directly by the Treasury instead of using private banks as a middleman. You, as a borrower, won't notice a difference.

[gazelle]

Ahh, ok. So at what point would you have to go to private lenders? Is it possible to borrow $100k+ all on the feds (for purposes of IBR repayment)?