The George Washington University is one of the most expensive schools in the country (tuition this year, without housing and other expenses: $44,103) — but according to the school’s financial aid administrator, its students probably won’t be getting much relief from President Obama’s student debt reduction plan. The GW Hatchet reports:
Associate Vice President for Financial Assistance Dan Small said the changes will only affect GW students who had loans before July 2010 – mainly upperclassmen and graduate students.
Before 2010, the University channeled its federal loans – Federal Family Education Loans – through third-party banks. After joining the Federal Direct Loans program that summer, GW was allowed to run its loans directly through the government without banks.
Students receiving federal aid who enrolled in the University before summer 2010 may have both types of federal loans, on which they are required to make separate interest payments.
The consolidation of loans may allow students to pay lower interest rates on their overall sums instead of two higher rates on different federal and bank plans, Small said.
The White House press release said the reduction of interest rates could be up to 0.5 percent for nearly 1.6 million student borrowers who have both Direct Loans and Federal Family Education Loans.
Yet Small estimated the affected population is relatively small and savings could be minor.
The loan consolidation portion of the plan is the most immediate part of the plan. Thursday, David Indiviglio of The Atlantic estimated the savings from debt consolidation for the average graduate would be less than $10 per month.
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