The new changes to the student lending process have created another reason for student loan debt consolidation. All Stafford, Perkins, and Plus loans are now serviced through the federal government, cutting out the banks. The repayment terms of these new loans are now different, becoming more favorable for the student.
Rather than place a time limit on when the student must repay the loan, the government has set a cap on payments. Payments are set at 10% of a student's monthly income, although the government does not penalize early payment. These new repayment terms can stretch the repayment period beyond the previous eight year limit set by the banks.
For students entering a tough job market, this can be the difference between education creating opportunity and education leading to bankruptcy.