(PRWEB) May 08, 2012
Student loans continue to be a controversy for those who need money for college but don’t necessarily qualify for grants. Student loans provide the funds necessary to finish school, but all too often, students sign up for more than they can repay in the long run. The College Board reported in “Trends in Student Aid” that in 2006 to 2007, the average debt per borrow increased 18 percent up to $22,700 on average. Whether students have just one loan or multiple, there are currently many who believe that they should be fully aware of how student loans will affect their lives, present and future. President Obama recently began the initiative “Know Before You Owe,” similar to other education reform that wasn’t supposed to go into effect for another couple of years.
”Know Before You Owe” would make student loans more affordable and alleviate some of the financial burdens for recent graduates. Students with federal loans who enrolled in the Income Based Repayment Plan will experience a cap on their federal student loan repayments at 10 percent, which is a major drop from the current 15 percent of discretionary income. All remaining debt on federal loans will be forgiven in 20 years, currently 25 years.
That isn’t all that this new bill will do for students. The second part will encourage students with one or more types of federal loans to consolidate them for a 0.5 percent interest rate reduction. The administration has estimated that up to 1.6 million borrowers will be able to save hundreds of dollars each month. The new plan will make student loans a better option for those who need money for school and don’t have the same financial aid options as other students.
Students can always research student loans and understand exactly what the terms are for accepting this kind of aid. YourDegree has consistently researched all types of financial aid and alternatives to student loans. Articles and blog posts frequently provide students with information on choosing different financial options and the best student loans, showing how to apply for subsidized loans and unsubsidized student loans through FAFSA or simply how to avoid student loans altogether by taking advantage of lesser known financial aid.
First Impression Interactive fully supports the “Know Before You Owe” student loan initiative. The reform would help current graduates struggling with debt, but it will also aid future students who need more money for school but don’t necessarily want to owe for the rest of their lives to get an education. Even with the new repayment plan and loan forgiveness, tuition exists in all kind of ways and researching other financial aid ideas should be a top priority. The new initiative certainly will give more information to students, allowing them to make the best decision to pay for school.