Stafford Loan Justice

CRS Report on Wm. D. Ford Loans

Senator Bennet’s aide just snailmailed Federal Student Loans Made Under the Federal Family Education Loan Program and the William D. Ford Federal Direct Loan Program: Terms and Conditions for Borrowers (David P. Smole, Congressional Research Service, April 21, 2010).

Note on p. 25 regarding the income-continget repayment plan (ICR):

“The rules for the ICR plan specify that capitalization of unpaid interest may not result in the balance of the loan exceeding 110% of the original principal amount. If this occurs, any additional interest that accrues will not be capitalized, but must still be paid by the borrower.”

And p. 28:

Capitalization of unpaid interest may not result in the balance of the loan exceeding 110% of the original principal amount. If this occurs, any additional interest that accrues must be paid by the borrower.

110%.
One Hundred and Ten Percent
.

Truth in lending anyone?

This CRS report isn’t on the Web, so I scanned it. You can read it here.

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Written by S.

July 19, 2010 at 12:30 am