On February 22, 2012, ED released DCL GEN 12-04 which provides information on upcoming Federal student loan changes, as outlined below:
- The current 3.4 percent interest rate on Direct Subsidized Loans for undergraduate students will end for loans first disbursed on or after July 1, 2012. Absent Congressional action, the interest rate will reset to 6.8 percent on July 1, 2012, in accordance with the Higher Education Act.
- The additional unsubsidized loan amount of $2,000 for eligible dependent students, as authorized under the Ensuring Continued Access to Student Loans Act (ECASLA), continues to be available and is not affected by the fact that the special treatment of these loan amounts for 90/10 purposes ended June 30, 2011.
- For loans with loan periods beginning on or after July 1, 2012, graduate and professional students are no longer eligible to receive Direct Subsidized Loans. The beginning date of the loan period is critical since loans with loan periods that have a beginning date that is before July 1, 2012, are not affected by this change.
- For loans first disbursed on or after July 1, 2012, the up-front interest rebate will no longer be available. ED will continue to offer interest rate reductions to Direct Loan borrowers who agree to have payments automatically electronically debited from a bank account.
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