As Congress looks for ways to cut costs and reduce our national deficit, proposals that are in place here in the month of May could lead to problems for students in the future when it comes to student loans and interest rates, as there are proposals that could change federal student loan rules to charge students interest while they are in school rather than delay interest payments until after graduation. Officials feel that if interest is allowed to accrue on student loans while men and women who hold these debts are in school, it could bring more income to the government, which could be used to either offer more assistance in Pell Grant funding or simply pay down and national deficit, but when it comes to student loan debt, these proposed changes could put individuals in a position where more alternatives need to be sought out.
While this idea of allowing interest to accrue while students are in school is only a proposal, it could be one way that more funding can be received from students who are using federal loans as a way to help them meet college costs, and in general, student loan debt is one of the main problems that many graduates have in their financial life, so the number of individuals who acquire student loans has been growing over the past few years. Since we are nearing summer of 2011, many students have either already received funds from scholarship packets, grants, or have already committed to borrowing student loans, but in the coming months if legislation brings about changes where interest will begin to compile while students are in school, it could lead to higher overall costs.
This can be troubling for both bad credit and traditional students alike, due to the fact that some individuals, like those who may not get enough funds from scholarships and grants often turn to federal loans as a result of the inability to meet college costs out of pocket and for students who are returning to school but maybe a bad credit position, federal loans may be their only option if, again, other sources of financial assistance are not found. While traditional students and bad credit students alike have the option of borrowing federal loans, and this can be one of the more easily accessible student loan options that these men and women may have, there are also repayment plans that can help students find more affordability on their student loan debt obligations as well.
However, students must keep close watch on how student loan changes may play out, as financial aid counselors have often suggested that students seek out as much scholarship and grant funding as they can first before even considering loans, but if loans are necessary these federal loans have always been a popular choice thanks to, again, low interest rates, multiple repayment plans, and general availability. Yet, if interest will begin to compile while a student is in school, this could lead to higher costs that students must meet after graduation and, again, necessitate that more free financial aid be found.