FFEL late fees assessed may increase to 16%

The Department of Education is recommending changes to FFEL late fees and default rules that increase FFEL interest rates to as high as 16% when a borrower defaults on student loan payments.  Current rules protect borrowers from high interest rate assessments on overdue student loans and stop collection efforts when borrowers enter payment rehabilitation programs within 60 days of defaulting on their FFEL student loans.

Under the proposed new rules, borrowers in default status could be charged interest rates as high as 16%. Collection efforts would start immediately upon default. A defaulted student loan is one that goes unpaid for 9 months or 270 days. FFEL loans are old federal student loans that were made prior to 2010. They account for approximately 25% of the existing 1.3 trillion dollars of outstanding student loan debt. If the proposed changes are approved by congress, the increased FFEL late fees and penalties could amount to an additional 65 billion dollars based upon the number of accounts presently in default.


debt solutions debtfreedom debtsolutions

The information contained in this website is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. Through this website you are able to link to other websites which are not under the control of Consumer Debt Solutions, Inc. We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.