Federal student loans are supported by the United States government. Do not rely on the credit records of the borrowers, because most of the people who apply for and receive them come straight out of high school and do not have a credit history yet. It has lower interest rates that lead to lower monthly payments. While government student loans may not be enough to cover the entire cost of education alone, they provide a great opportunity to save money to fund a college education, since they currently have a maximum interest rate of 8.25%, with realistic rates much lower.
Student loan consolidation with the help of the federal government is also available
The US government, besides lending money to students, offers loan consolidation services. Many students find it very difficult to service the amount of debt they accumulated during their school years, especially without having a stable job in their field of education. While it may take some time and effort to work on a student loan consolidation, the benefit is significant, allowing the student to get a lower monthly payment instead of a lot more. Interest rates are low, usually much lower than what you would get from private lending institutions, and many incentives are offered for those who pay in a timely manner. With a wide variety of options available from the federal government, it’s important to research them all, ensuring the right terms for your individual needs.
Student lending is being modified with more changes on the way
There have been many changes in the way student loans are handled in recent years. The federal government acts as the largest supplier of student loans, buying back loan securities from banks and other lenders. The Obama administration made these changes to make higher education more affordable during turbulent times in the economy, ensuring that more people had access to a college education, since many private lenders had cut student lending activities during the recession. The government has undertaken massive student loan buyback activities to keep the banking system from collapsing. While this was expected to be a temporary, short-term activity, it enabled many people to obtain cheaper student loans.
With more changes to student lending the way the government enforces, uncertainty rises as to whether it will benefit students’ ability to get financial aid. Obviously, if the government continues to pour money into the failing banking system, obtaining funding for university education could be a difficult task to accomplish. Today, with the positive changes for students, it is time to think about getting a student loan or refinancing your current obligations.