Student Loans Myths Debunked

The amount of misinformation about student loans is amazing. Part of the problem is that the media is on the title to be spectators and rarely the whole story. You see it everywhere, some sensational headlines screaming against you, but reading the article there is little support from the headlines. The media has become all about the Classification (read money).

New changes to student loans, which included the care health care reform bill is a good example. The reason that he was involved in was to help offset care. How? Taking the loan guarantees by the banks (which do not have to pay any unpaid student loans) and direct the collection of interest on student loans. They have essentially taken the intermediary that is guaranteed not to lose money, and got all the profits interest payments on these loans.

And since interest rates are so low, so that banks and other lenders (eg 1%), and now get a guaranteed amount of at least 4.5%, which is a lot of money changing hands. Private lenders, you get even more, because their prices are sometimes double the price of government. Student loans are big business, and a great credit risk, is still a strong industry, regardless of the economy.

OK, on ​​to the biggest myths about student loans, now that the government has changed many rules. I'm not sure how this myth ever got started because the language is simple and easy to understand in the new bill. And rumors and conjecture do not tell.

Student loans will be more expensive now

The changes most involved expansion and reduce the total payments after graduation. The bill reduces payments by 15% of discretionary income to 10% and loans can be forgiven now 20 years instead of 25 years it was before this bill. Thus, these changes actually make it easier and cheaper during the repayment period.

Available financial aid will be reduced

Financial assistance covers many areas of grants, private scholarships, grants, college or university grants and allowances, and student loans. Because of the less stellar economy, there has been a decline in private donations and related programs, but there was nothing to do with changes of government student loans. Student loans have always been the primary method of student financial aid and are still available, just as they were before any changes. You will not know what you can qualify for until you go to your financial aid office of colleges and let them review your particular situation.

I can not get financial assistance because the income of my parents

Some financial aid is based on the needs and financial situation of the parents. But most colleges go through the whole picture and not just the level of income. Even if parents make a good income, they may have three kids to college or even high medical expenses or other factors that limit their ability to pay for college. Many scholarships are based on results, not the financial situation. Private grants and funding programs based on criteria other than financial need (a good example is that if you or your parents work for a company that provides financial assistance for college). It is recommended that all participants go to their financial aid office of colleges and let them decide what you are entitled to because they are the most credible source.

The bottom line is that financial aid each school can have different programs and resources. And the best way to discover the facts is to get your financial aid office of colleges. Schools are the best source for all types of financial support and work with you to find someone that you are entitled to obtain all possible resources.