The rising cost of college education forces too many students to take on high loan debt burdens and many have to work long hours that interfere with their academic study. In this difficult economy, when competition for jobs has increased and at the same time student’s ability to pay for college has decreased, it is important for the federal government to make smart investments in our students. It is believed that these investments will make our young society and our economy more competitive in the global marketplace.
This summer, the Education and Labor Committee and Congress have done a lot of work over the last few years in making higher education more affordable and accessible to students than ever before. For example, starting on July 1st, 2010, students will see lower interest rates on their student loans, down to 4.5% from 5.6%. The maximum annual Pell Grant scholarship has been raised to $5,550 and will continue to increase over the years. In 2008, about 6 million students received the Pell Grant scholarship. During this summer, all new federal student lending will be converted to a Direct Loan program; meaning that instead of providing banks with taxpayer subsidies, students will receive loans directly from the government, saving taxpayers $61 billion. There will be an estimated 30 million new student loan borrowers between 2014 and 2020.
New borrowers who assume loans after July 1, 2014, will be able to cap their student loan repayments at 10 percent of their discretionary income, and, if they keep up their payments over time, will have the balance forgiven after 20 years. Public service workers will see any remaining debt forgiven after only 10 years. More than 1.2 million borrowers are projected to qualify and take part in this new benefit.
For tips on how to apply for federal student loans and grants:
http://edlabor.house.gov/how-to-apply-for-federal-student-loans-grants/index.shtml
