Students across the country are scrambling to get their student loan applications completed as the May 1st deadline set by most collages is quickly approaching.

With just 2 weeks to go there seems to be a lot of confusion this year because of recent student loan reforms, however, the process for applying for grants and loans is still the same, minus shopping around for a loan provider. The Federal Government has taken over the student loan program providing all students with a single source of funds at a flat rate, however changes are yet to be reflected on most websites.

I’ve seen questions posted on forums lately such as, “What will people who got loans last year do with their loans?”, “How will existing loans be bought and sold by banks and institutions?” and “can I still get a student loan from a bank or private lender?”.

To the best of my knowledge, existing student loans can still be freely traded by banks. Active students who already have existing student loans can choose to get a direct federal loan this year and maintain a mix of various loans until graduation, then optionally consolidate them in a federal program. You can still get private loans from banks and institutions but the interest rates will be much more expensive.

One key part of the new student loan reform that I find most interesting and potentially the most helpful is income based repayment programs. Simply put, your monthly payment will depend on the amount that you make.

I think this is very helpful to poor communities as well. Perhaps smaller towns will be able to get more talented young doctors to move to their city if they aren’t being faced with monthly student loan payments that require them to work in more lucrative markets and metropolitan areas, etc. There is a chance the difference between repayment rates could be so low that it will have no major impact. I always try to be optimistic.

The White House estimates around 1 million borrowers will be able to take advantage of the new plans.

James Boyle explains what the recent changes to Student Loans means to students and corporations.

James says net/net there is a $200.00/student per year benefit gained by the Federal Government issuing all student loans.

One exciting new part of Obama’s overhaul of the student loan program is the deferment and forgiveness of loans in return for public service and government jobs.

Many people in the private sector say this move will pull valuable workers from the corporate world into government services.

Watch this CNN Report for further information.

As part of the recently passed Heath Care Act, President Obama has taken over and expanded the student loan program.

The federal government will now issue loans and grants through the Department of Education rather than give banks the subsidies to do so via the Federal Family Educational Loan Program (FFELP).

Overall, the plan is to save nearly $60 billion over 10 years. There are many critics of the government takeover of the loan programs. In all, over 10,000 people involved in the student loan industry are expected to lose their jobs as a direct result of this action.

Combine all your Federal Student Loans into a single loan and take advantage of lower rates, longer payback periods, and less hassles.

The Higher Education Act (HEA) enables a loan consolidation program under both the Federal Family Education Loan (FFEL) Programs and the Direct Loan Program. Under these programs, a borrower’s loans are paid off and a new consolidation loan is created.

You can get all the details and apply online on the Federal Direct Consolidation Loans are of the Borrowers Services website.

Parents can no longer count on Student Loans to fund their children through college.    As the economy weakens, the credit markets are beginning to tighten and this is leading to increased scrutiny by loan review personnel.

College costs have nearly doubled in the past 2 decades while  medium house hold income has risen 20% since 1980.    The increased tuiton and book costs means increased risks to banks.

Students that get accepted into loan programs are being hit with high interest rates.   In most cases, payments for today’s student loans last for a graduate’s entire career.  If the economy continues to cool off, loan rates will likely increase and so will the number of denied applications.