Issues related to students debt and counseling regarding higher education

Student loan industry are rapidly increasing with higher economic returns that are associated with college education and increasing demand from students and their parents for grants and scholarship funds and financial aid that have not kept in pace with the rising amount of tuition and fees. A wide range of federal financial aid programs do provide billions of dollars in assistance to students each year including grants to student loans to work study. The procedure can be confusing for both students and parents. Student loans play an important part to financing the cost of higher education. However there has been a very significant shift from federal needs-based grants to subsidized loans to guaranteed loans including tax credits that are very important in assisting middle class students.

The students loan industry is growing very rapidly and profitably. Certain enterprise would manage upto $ 142 billion in student loans. On the other hand private loan account for a quarter of all student loans and they are made directly by lending institutions to the borrowers. Private loans may be twice as profitable for lenders as compared to federally subsidized and guaranteed loans. The increasing level of debt may be of concern to the student who may find his career choice and life options constrained by debt. A very higher percentage of students that are attending for post secondary schools take out student loans out of which nearly 80 percent go for federal loan and 15 percent may go for private loan many of which come from a low income families. Counseling and consumer protections also may help protect students and their parents as undergraduate and graduate students may agree to loan terms easily without fully understanding the terms as they may not be considered as sophisticated borrowers. They may not even understand that they do have an option for taking less expensive federally subsidized and guaranteed loans.

Personal assistance for students and their parents may help secure them. Many of the students enroll in public colleges and universities every year. The state do offer its students different types of programs including grants for undergraduates, occupational students and teachers. The student aid commission administers these and a number of other such programs for the students. It also does provide a considerable financial assistance to the students. A wide range of federal financial aid programs provide the students billions of dollars in assistance each year. A concept of student financial need as a basis of awards of scholarships is also endorsed by the commission on higher education. The Federal Government is thus more involved in providing financial assistance to college and university students. Many of the need-based loans were also made by private lenders but the federal government guaranteed these loans in case of default and also paid interest while the student was in college.

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