A degree can cost the average student $23,000. Some good news is that when recent changes in the federal government’s student loan program take effect, students can invest in traditional and online college programs with lower payments that can disappear earlier than they have been.
The changes aren’t exclusive to online degree-seeking students, and President Barack Obama called them “one of the most significant investments in higher education since the G.I. Bill”, the New York Times blog, The Caucus, noted.
The changes are part of the Health Care and Education Affordability Reconciliation Act of 2010 that Obama signed into law in late March. By ending fee-based, guaranteed agreements with banks and private lenders that issue student loans, the government expects to save an estimated $61 billion in taxpayer money over the course of a decade. The changes in part benefit the federal government’s “direct” student loans that typically don’t involve credit checks or collateral and generally don’t have to be repaid until after graduation. Students issued direct loans in 2014 and afterward are among those to experience the changes.
“To make sure our students don’t go broke just because they chose to go to college, we’re making it easier for graduates to afford their student loan payments”, Obama was quoted in an Associated Press report as saying. “By the end of this decade, we will once again have the highest proportion of college graduates.”
The United States currently holds the #14 slot in terms of college graduates worldwide. President Obama wants the country to rise to what is presently South Korea’s top position, according to a CBS News report. To help make college online and otherwise more affordable, the federal government each year provides students with grants, loans and work study program offerings. More and more students are said to be enrolling in college, online college offerings make college more accessible and online degree programs are offering a greater variety of choices. Many students, as a result of the economy, are also said to be seeking tuition assistance.
Participating colleges and universities award students the government’s direct Stafford and Perkins loans. The Perkins loan, which is based on financial need, is awarded in part based on income and assets. Perkins loans are available at 5 percent interest rates, and the government pays the interest while students are enrolled in college online at least half time. Stafford loans, with interest rates said to be as low as 5.6 percent or less, can be “subsidized” for students with financial needs. With subsidized Stafford loans, the government again pays the interest as long as a student is enrolled in college online at least half time.
Students have traditionally been required to devote 15 percent of their income to repaying direct loans, according to reports. When the changes take effect in 2014, reports noted, students have to only dedicate 10 percent of their income to the payments. Students who pay their loans on time might see the loans forgiven after 20 years or less instead of as many as 25 years, according to reports.
The scholarships and grants changes are to also benefit federal grant recipients and community colleges, as well as schools online. Savings are to be passed on to community colleges to help pay for education and career training programs and to expand federal Pell grants that qualifying students with financial needs don’t have to repay. If you are interested in getting more information about distance learning degree program, check on the internet.