Fighting the Barriers of Student Loans, Research Paper Example

Students loans were applied individually and separate from the grants. Since President Clinton Administration students loans became part called “FAFSA” Free Application for Federal Student Aid. Students who are from low, moderate and lives in poverty are eligible to apply. Those who aren’t can choose the option in applying for a private student loan. When a student applies for the FAFSA to pay for their education, they can choose the option not to accept the loans. The disadvantage of students loans are the interest rate of 6.8% or more. If the student choose to take out student loans  then, they should at least try to limit the amount of money from the loans. The interest rate will accumulate while they’re in school, after graduation and when they’re working when paying it back. They’re several types of Federal student loans, subsidized loans, unsubsidized loans and parent loans for undergraduate students. The amount of the loan is determine the student’s year. For instance dependent students in their first-year will receive $5,500 and $3,500 subsidized, second-year $6,500 and $4,500 subsidized,  third-year $7,500 and $5,500 subsidized. The maximum total debts for dependent students undergraduate loans are $31,000 and $23,000 subsidized. Independent first-year students $9,500 and $3,500 subsidized loan, second-year 10,500 and 4,500 subsidized, third-year $12,500 and $5,500 subsidized. Graduates are eligible for $20,500 and the maximum total debts are $57,500 and $23,000 are subsidized. The maximum total debts for all undergraduates, graduates and  professional students $138,500 and $65,500 are subsidized.

Students are required to pay back their loans six months after they graduated. They can pay off their loans for ten-years with an extension. If the student experience financial hardship, work less than 30 hours a week or becomes unemployed they can apply for a deferment. Its postpone their payments even though the interest will still accumulate. And when the student re enter the workforce, they will more likely to struggle in paying back they’re loans with higher interest rate. Sometimes it would be best if the student rather to pay the interest, if possible to avoid paying higher payments.

When student breech a contract about their student loans in not paying back, the federal government will take action. If a student is working, the government will arrange to have their tax refund applied to their payments. Also students who don’t make arrangements about their loan payments, It will affect them when applying for other loans such as: home, car, credit cards etc. The government has several programs for students who are struggling with their payments. Students can have their loans consolidate. Instead the student making loans to different lenders, they can make payments to one lender in avoiding higher payments. The student loan forgiveness program, qualifies those who work for the federal government such as teachers, social workers, nurses, military personnel. These professionals whose income most of the time aren’t stable and qualifies them to have their student loan payments eliminate.

In the early 21^st century, the enrollment of colleges in the U.S are rapidly declining. More students, rich or poor instead going straight to four-year institution, they’re choosing to go to a two-year college first and afterward sometimes a public four year. Students are choosing other alternatives to limit taking out student loans. More are applying for scholarships and working students are taking advantage of their employer who offers to pay student tuition.

Although student grants that require in not paying back, It helps to limit how much a student choose to take out. It best that students should consider options with more advantage and limit in taking out student loans.

Work Cited

“What the difference between direct subsidized loans and direct unsubsidized loans” 2012 Web. 4 Dec. 2012 http://studentaid.ed.gov/types/loans/subsidized-unsubsidized

“More Students Choosing Two and Four Year Public College” US News/Education. 2012 Web. 28 Nov. 2012

“Senate Close To Deal To Extend Low Interest Rates On Student Loans.” CNN Politics 2012. Web 28 Nov 2012

“Republicans Block Bill To Extend Low Interest Rates” The Huffington Post 2012 Web 28 Nov. 2012.

“53% Of Recent College Grad’s Are Jobless or Underemployed-How”Atlantic 2012. Web. 28 Nov. 2012.

“Fewer Low Income Students Going To College” WSJ Blogs 2012. Web 28 Nov. 2012