Timothy J. Sierra, Attorney at Law Trusted Florida Bankruptcy Attorney Since 1987
Call Today For A Free Initial Consultation

July Means Changes to Federal Student Loans

Summer has arrived, which has brought about new changes to Federal Student loans that took affect July 1st. Here are some important changes that borrowers should be aware of regarding student loans:

1. Interest Rates are changing. Interest on all loans taken out on or after the first of this month will have a fixed interest rate throughout the life of the loan. The maximum rate for future student loans will not exceed 11 percent. This applies to Direct Subsidized and Unsubsidized Stafford loans for undergraduates, Direct Unsubsidized Stafford loans for graduate students, and Direct Graduate and Parent PLUS loans.

2. Closed School Discharges. Schools shutting down can be consequential for its students. There are previous protections for these students who are in a situation where their school closes while they are attending. However, with the new rules implemented at the start of the month, time has been extended from a student having to be enrolled within 90 days of the date of the school's closing, and they are unable to complete their requirement for their degree to have their Federal Student loans discharged, to 120 days.

3. New Income-Based Payment Options. New borrowers who take out their first loan on or after the 1st of July 2014 will qualify for Income-Based Repayment (IBR) that has a maximum payment of 10 percent of a borrower's disposable income, compared to the 15 percent in the old Income-Based Repayment plan. Also forgiveness of any remaining balance will be effective after 20 years, not 25.

4. Relief on Defaulted Loans. The options for borrowers who default on their student loans are: rehabilitation and consolidation. The process of rehabilitation is ambiguous in deciding and settling on a calculated repayment amount. However, now as of July 2014 the process will become more standardized for all borrowers. A borrower who starts the process of rehabilitation on or after July 1st will have their payment calculated based of 15 percent of their disposable income. If that amount is too high for their financial situation, they can submit a financial hardship form to apply to have their payment re-calculated with their whole financial situation taken into account, not just their income.

Knowing what new changes have been made to Federal Student Loans can be helpful to those who have taken student loans out or are planning on doing so in the future. Student loans can be an overwhelming responsibility, and if one should find themselves in debt due to student loans, they should contact an attorney who is knowledgeable about such debt, to help guide and assist a debtor to a financially stable life.

Work Cited:


No Comments

Leave a comment
Comment Information
  • "When I first came to the decision to file for bankruptcy, I had no idea where to start. I began researching attorneys on the internet and came across the information for Tim Sierra. Since he specialized in bankruptcy and had a lot of experience......"
  • The process of going through bankruptcy could be very overwhelming but Tim made me feel at ease and I felt that my needs were being taken care of. I truly feel that he had my best interests in mind and the lines of communication were always open....
  • "I had to file a Chapter 7 bankruptcy. I didn't know anyone who could refer someone so I took a chance and just looked on the Internet. I don't remember exactly why I chose Mr. Sierra, but I am glad I did..."
  • He was honest, straightforward, and hard-working. In my case I ended up with some extenuating circumstances and he handled the matter professionally even though I'm sure the work probably exceeded what he originally felt it would be....
  • I don't ever write reviews, and I had no prior relationship with Mr. Sierra. This review is simply being written as a service to others that Mr. Sierra is an excellent attorney and should be considered for your needs if you need one....
  • "I'm very happy to have been referred to Tim for my Chapter 7 filing. He was knowledgeable in his field and very responsive in replying to any questions or concerns I had. Tim was also very accommodating with meeting times..."
  • " I recently was in need of Mr. Sierra's services and I found him to be very understanding and helpful in my particular circumstance. He met with me and explained everything in full detail and also answered every question that I had....."
  • " I recommend Timothy Sierra a loyal and dependable lawyer. When you talk to him you feel that you are with a friend or a member of your family. Timothy is able to lead you in every step of the process. Good job Timothy."
  • " Bankruptcy is a private and personally devastating life event. Timothy Sierra and his assistant, Nancy, made the process as painless as possible. They kept in close contact via phone and email so I always knew what was happening in my case...."
More Testimonials
Email Us Today

Schedule A Free Initial Consultation To talk to an experienced Tampa bankruptcy attorney, call 877-492-7449 or fill out the form. All calls are returned within 24 hours.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

We Have Offices in Tampa, Riverview and Brandon For Your Convenience.

Tampa Office
118 South Rome Avenue
Tampa, FL 33606

Toll Free: 877-492-7449
Toll Free: 877-492-7449
Phone: 813-463-2256
Phone: 813-463-2256
Fax: 813-258-4746
Tampa Law Office Map

Riverview Office
6314 U.S. Highway 301 South
Riverview, FL 33578

Toll Free: 877-492-7449
Toll Free: 877-492-7449
Phone: 813-463-2256
Phone: 813-463-2256
Fax: 813-258-4746
Map & Directions

Brandon Office
305 North Parsons Avenue
Brandon, FL 33510

Toll Free: 877-492-7449
Toll Free: 877-492-7449
Phone: 813-463-2256
Phone: 813-463-2256
Fax: 813-258-4746
Map & Directions