Obamacare update and student loan misconceptions

One of the rare non-Apple laptops seen in an otherwise cool park full of cool peopleIn the news recently:

The Obama administration announced in a blog post that the “employer mandate” portion of the Affordable Care Act will be delayed to 2015, to allow more time to work out the details of implementation. This means that companies with at least 50 full-time employees will now have until Jan. 1, 2015, to provide the required health insurance coverage, although the administration is encouraging voluntary compliance in 2014 as a means of “real world testing of reporting systems.”  President Obama’s announcement of the change raised a few eyebrows about whether or not he has the authority to make a change to a law without Congress, and the House passed a bill this week to put it through the proper channels. Also included in the House bill was a delay for the individual mandate.  Where the bill goes from here remains to be seen.

You may have heard that student loan interest rates are going up. While this is true, there is a common misconception that all student loan interest rates are increasing from 3.4 to 6.8 percent. The fact is however, that this will not affect any loans originated prior to July 1, 2013. The rate increase only impacts new Subsidized Stafford loans. Borrowing limits remain the same; and the rate increase on the maximum allowable $19,000 borrowed over four years of college changes the payment on a standard 10-year repayment plan from $186.99 a month to $218.65, or a $31.66 monthly increase. It’s nothing to sneeze at, but not exactly the disaster that has been portrayed.

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