Student Loan Help and Financial Aid

The cost of education had increased about 10 times in the past 40 years. It is very common these days to have about 6% raise in average tuition fees every year. To consider an exact figure, the registration charge at the UCLA (University of California, Los Angeles) was $208 per quarter in 1973 whereas today it is over $2,300 per quarter.

Along with most of the things, the educational cost has also increased to about 10 times than what they did about few decades back. However average income per head has not risen more than 3 times over the same period for instance the salary of about $23,000 some decades back is now around $41,000. This figure varies according to age and gender.

Today there is more financial aid that is available to tackle the financial constraint caused in current educational costs than few decades back. There are private and Federal lenders that offer student loan to aid the parents and students pursuing education. Earlier the only available loans were Stafford and Pell Grants where the students had to completely rely for financing the educational costs if not living expenses. Pell Grants loan programs are still available and they are need-based and offer only a small percentage of the entire educational cost. Stafford loans are again need-based and offer between 25% and 40% of the educational cost. Perkins loans are categorized in the same range however they are reserved specifically for families with lower income range.

Today fortunately PLUS loans are available to help the parents and not the students to aid the student’s education. The interest rates for PLUS loans are average and though there are some restrictions as well as additional fees, they are often preferred and mostly available as a total package to most a large section of students today. Today there are many types of student loans available where even a specific amount such as $4000 per annum is disbursed in two split payments in each semester. However up to 4% may be deducted as fees from the disbursed amount which would mount up to $160 for $4000. Hence it is important to look out for loans with no-fee structures.

The advantages of Federal loan programs are that they do not charge high fees and no credit check is performed. For federal loans such as the subsidized Stafford and others the interest is paid exclusively by the government. These days the financial aid is available as a package that comprises of funds from grants, scholarships, Federal and Private Loans. The interest rates may vary between 5% to up to 7% or higher. The recent rise in the number of defaults on sub-prime lending, have prompted the lenders to be strict about the income and credit history.

It is always suggested to shop around for various common loan programs and evaluate the interest rates and other charges and compare before reaching a conclusion. http://www.finaid.org/ is a site that summarizes such valuable information for those looking for various student loan programs.

         

Student Loan Facts and Information

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