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Dec 5, 2007

New laws for refinancing - can you reconsolidate loans?

Can you reconsolidate student loans? That's the question...In other words, is reconsolidation of loans allowed?

According to Student Debt Relief Act of 2007, yes - it does allow reconsolidation of loans.
More to this:
- it also increases annual maximum Pell Grant program to $5,100 this year (2007) to $6,300 in 2011;
- it establishes the Fair Payment Assurance Program which caps loan repayment at 15 percent of a borrower's income for low income borrowers;
- it reduces FDLP origination fee to zero;
- it extends tuition tax credit.

A brief summary of Student Debt Relief Act of 2007:
Jan 22, 2007, Edward Kennedy (D-MA - Senate Health, Education, Labor and Pensions Chairman ) introduced S. 359, the Student Debt Relief Act of 2007.
Core moments:
1) The bill proposes to provide incentives for schools to switch to the Federal Direct Loan Program;
2) halve student loan interest rates;
3) increase the federal Pell Grant limit;
4) cap federal student loan repayment at 15 percent of a borrower’s discretionary income.

Speaking of other legal stuff on regard of student loans - there is a Sunshine Act, too.
Edward Kennedy and Senator Dick Durbin (D-IL) introduced S. 486 on Feb. 1, 2007 - the Student Loan Sunshine Act.
The bill would require schools and lenders to report certain activities if the school and the lender have an “educational loan arrangement,” defined as an arrangement or agreement under which the lender provides education loans to students (or parents of students) at the school.
The bill is noteworthy in that its scope encompasses private education loan activities as well as FFELP loans.