The nation is still feeling the effects of the Great Recession despite economists reporting that it is over. Unemployment rates are still hovering around 9 percent, the economy is the top concern for more and more Americans, and political pundits are predicting a tough re-election campaign for Barack Obama if things don’t turn around quickly.

A major sector of the country that is having a big impact are students graduating from a four-year university saddled with debt just as they are entering their careers. And with the economy the way it is, many students can’t find jobs or jobs that pay well, so debt becomes an even bigger burden that can last for years. Many graduating students may have to default on their loans. That’s not a very good way to start adult life.

The average cost of a four-year public university for an in-state student is $7,605 per year. The average cost of a four-year public university for an out-of-state student is $11,990 a year. And the average cost of a for-profit four-year college is $27,293 a year. And that’s for classes and room and board. There are other costs to attend school that are not covered. These include indirect costs like books, supplies, travel, personal expenses, off-campus meals, and more. All adding to the student load.

As a result, many students graduate from college with $20,000 in student loan debt. This is said to be a 108 percent increase in just 10 years. Even students graduating from a two-year technical school find themselves $10,000 in debt. In addition, graduate students trying to earn a law or medical degree are saddled with debt of up to $100,000. Earning potential in the fields of medicine and law is said to be directly related to your debt. However, these graduate students begin their careers doing so-called hard work as residents or as established paralegals. You can’t expect to make enough money to attack debt early with jobs like that.

The US Department of Education recently released a report saying that recent student loan default rates have risen close to 2 percent over the previous year. According to the report, for every graduating student who began repaying a loan as of October 2008, 8.9 percent were in default on their loans by the end of 2010. That’s an increase from 7 percent of students who have defaulted on their loans compared to 2007.

Some who are knowledgeable on the subject say that one of the main reasons this happens is that the students who get the loans simply don’t understand the loan process. In short, they are financially illiterate 18 year old high school students who don’t know how to finance their education. As a result, they take out expensive and confusing loans.

A major topic at a recent Florida Student Financial Aid Association conference in Naples, Florida discussed ways to educate students on how to borrow money. In addition, the process of obtaining a student loan is becoming more difficult. It is reported that fewer students in need are able to obtain Pell Grant loans because the current economic situation and the resulting tighter budgets are causing groups like Pell to offer fewer loans. States are also feeling the crisis. For example, in Florida, the Bright Futures scholarship program has had to reduce the scholarships it awards. Students in the top tier of recipients will receive $3,030 next school year for a 30-hour course. That is 19 percent less than the previous year.

And all of this is about to negatively impact schools. New federal government rules just announced may keep many colleges from having access to student aid money as part of an alleged crackdown on schools that are leaving their students in the lurch with too much debt and doing nothing to improve their performance. job prospects. The new rules include regulations that for-profit schools must follow to access federal financial aid money. If graduates owe too much of a percentage of their income or too few graduates at a given school are paying their loans on time, then that school could lose access to Pell grant money and other federal student aid. The result of this is that affected schools will have a harder time attracting students. This could be a great success for a school because it is said that up to 90 percent of a school’s income can come from government aid. Under the new rules, schools will be eligible for federal financial aid if at least 35 percent of their former students are paying off their loan. In addition, a typical graduate’s estimated annual loan payment should not be more than 30 percent of the graduate’s discretionary income calculated at 12 percent of his or her total income.

Many believe such rules will make it more difficult for minority and low-income students to access funding options and thus limit the schools they can attend.

There are grant programs available that will prevent a student from falling into the debt trap. Scholarships are available that are categorized as student-specific, subject-specific, grade level, and minority. Common sources of grants include the federal and state governments, colleges and universities, and public and private organizations.

Federal grant programs to check include the Pell Grant, the Academic Competitiveness Grant, and the National Access to Science and Mathematics Grant to Retain Talent. State grants include state-administered grant programs. For example, Michigan’s grant programs are designed to help a cross-section of students, including general college students, academically gifted students, non-traditional adult students, and low-income students. Florida offers grants for the disadvantaged, disabled, Hispanic, and “academically gifted.”

Minority organizations also offer grants. There are scholarship programs for African American students, scholarship programs for Hispanics, scholarship programs for Native Americans, and scholarship programs for Asian Americans. There are also scholarship programs for women.

In addition, there are groups that offer scholarships in a broader general category, including low-income and disabled students, scholarship programs for graduate students and doctoral students, scholarships for undergraduate students, and scholarships for military students and families.

Finally, there are grants for specific subjects, grants to get an education in a high-need field like health care, and teaching.

Bottom line, if you need financing to go to college or graduate school, educate yourself on the student loan process before you begin, and once you have a good idea of ​​how things work, do your research and explore your options, including grant programs that provide you with money that you are not expected to repay.