Many people that are going to college will end up having to take out a student loan or multiple student loans before their college days are finished. However, new legislation from the Obama Administration has made student loans less burdensome on college graduates and more affordable to those who otherwise wouldn’t attend college because of student debt.
The Obama Administration has eliminated the “middle man” in the student loan business, which is the banking institution. Federal student loans have always been from the government, but private banks usually guaranteed these student loans and as a result charged higher interest rates.
Many student loans are now going to have lower interest rates and rather than working with a big bank college students will get their loans directly from the government. While there are no drastic changes in student loans, and some things will remain the same, these new rules are going to help students.
For instance, there are lower interest rates on certain federal loans, repayment for low income graduates will be more affordable as some will have their repayment amount based on a small percentage of their income, and simply cutting out the middle man is going to make the process easier.
While any college-bound student should look to exhaust their scholarship and grant options, these new student loans rules should make getting and repaying a student loan more affordable, so no one can use debt as an excuse not to further their education.