With the consistent rise in the tuition fees and educational costs in the US, an increasingly large number of college students are resorting to grants in order to get access to funds that need not be repaid. Instead of opting for programs through which you can get out of debt quickly, it is certainly better to opt for grants. Not all student borrowers are able to take out grants as there is a qualification criteria which they need to qualify but if you’re a financially hapless student who is looking forward to apply for grants to achieve your dream of attaining college education, you should be aware of the new rules pertaining to the financial aid programs. Those interested in taking out Federal grants will be subject to marked changes in 2012 and this may affect the entire education system. Read on to know what to expect from the government.

  1. Student loans will be dearer: Yes, this is certainly going to shock the financially distressed students but this won’t change the fact that since July, 1st, 2012, the interest rates of the subsidized Stafford loans will hop from 3.5% to 6.9%, according to reports of the US Department of Education. However, the unsubsidized Stafford loan rates will remain locked at 6.9%. The government has also abolished the subsidized Stafford loans for the graduates and for the next two years (until 2014), the undergrads won’t have to pay the interest rates during the 6-month grace period and the rates that aren’t paid will accumulate and also be capitalized back into the loan. The silver lining for the students lie in the fact that anyone with both Direct Federal loans and Federal Family Education Loan (FFEL) will be eligible for an interest rate reduction up to 0.5% as they consolidate them.
  2. Restraints will be brought in for Ability-to-Benefit students:  All those students who’ve entered higher education by passing the ATB or the Ability-to-Benefit test will also be subject to sudden changes. According to the present regulations, any college student who passes the ATB test or completes 6 hours of course work is eligible for a federal aid. But as of 1st July, 2012, according to the reports of the New America Foundation, they will no longer be able to get such federal aids. Therefore, the students who come from an economically and financially deprived background will suffer while on the other hand the students from the home-schooling secondary education background will be able to qualify for the grants.

If not grants, what?

If you don’t qualify for grants, how will you be repaying your student loan liabilities? Will you let them as they are or will you take some steps? Well, if your student loan debts are piling up, opt for student loan consolidation programs. If you’ve taken out a federal educational loan, you can easily take out a direct debt consolidation loan through which you can combine your multiple loans into a single monthly payment and repay your debts.

In a nutshell, all the above mentioned changes will assist the college students and borrowers to lower their borrowing costs and rein in their burden of student loan debt. Take cautious steps if you’re a financially struggling student while taking out loans and grants from the US government.

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