Federal student loans are backed by the United States government. They are not based on the credit history of the borrowers, since most people who apply and receive them have just finished high school and do not yet have a credit history. They have lower interest rates that result in smaller monthly payments. While government student loans may not be enough to cover the full cost of education on their own, they offer a great opportunity to save money to finance a college education since they currently carry a maximum interest rate of 8.25%. , with real rates much lower than that.

Student loan consolidation is also available with the help of the federal government

US government, apart from lending money to students, also offers loan consolidation services. Many students find it overwhelming to pay off the amount of debt they have accumulated during their school years, especially without securing stable employment in their field of education. While working on student loan consolidation can take some time and effort, the benefit is great in that it allows one student to get one lower monthly payment instead of many. Interest rates are low, usually much less than you can get from private lenders, and many incentives are offered to those who make payments on time. With a wide variety of options available from the federal government, it’s important to research them all, ensuring the right terms for your individual needs.

Student loans are getting tweaked with more changes on the way

There have been many changes in the way student loans are handled in recent years. The federal government acts as the largest student loan provider, repurchasing loan notes from banks and other lenders. The Obama administration has made these changes to make higher education more affordable during turbulent times in the economy, ensuring that more people can get a college education, as many private lenders had cut back on their student loan activities during the recession. The government has engaged in massive student loan buyback activities to prevent the banking system from collapsing. While this was only intended as a temporary, short-term activity, it allowed many people to get cheaper student loans.

With more changes to student loans being implemented by the government, the uncertainty arises as to whether these would benefit students’ ability to obtain financial aid. Obviously, if the government continues to pump money into the failing banking system, obtaining financing for a college education may be a much more difficult task to accomplish. Today, however, with student-friendly changes, is a good time to consider taking out a student loan or refinancing existing obligations.