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2006 Mitchell & Mitchell, LLC, all rights reserved.
STUDENT LOANS
Student loans have been around in one form or another for several decades. The programs change, but the basic facts remain the same. An educated populace is beneficial to the national economy. But the cost of educating the population is more than Congress is willing to take on. Therefore, they designed a program whereby young people could pay for their post-secondary educations out of future earnings – student loans.
Young people just out of high school with no employment history and no credit history aren’t a good credit risk. Most lenders are unwilling to take the chance that eventually these young people will pay back the student loans, so Congress decided to guarantee the loans. The lenders would fund the loans, freeing up tax dollars for other uses, but if the borrower failed to pay, the federal government would step in and cover the defaulted student loans.
Congress went one step further by deciding that student loans should be at significantly below market interest, so that students would not be burdened with an unmanageable debt load immediately upon graduation. They subsidize the interest rate to the lender. And then Congress went the extra mile by designing a deferment and forbearance program for student loans allowing borrowers to take time off from making payments on their student loans when they hit a rough spot in their financial lives.
These actions weren’t all taken at a single time. The program has evolved over the decades to become what it is today. It continues to evolve, with changes in the deferment program, changes in the discharge program, and changes in the consolidation program.
For more information about student loans, read “Surviving Your Student Loans”.
Student Loans:
Student Loan Topics:
Master Promissory Note, Student Loan Deferment, Student Loan Forbearance, Student Loan Consolidation, Student Loan Discharge, Student Loan Grace Period, Subsidized
Student Loans, Unsubsidized Student Loans, Stafford Student
Loans, Perkins Student Loans, Direct Student Loans, PLUS
Student Loans, William G. Ford Student Loans, Student
Loan Delinquency, Student Loan Default, Student Loan Payment
Options, Student Loan Case Studies, Student Loan Management,Additional Reading Relating To Student Loans, How Do I Get A
Student Loan, How Do I Confirm the Status of my Student Loans, Why
Do I Owe Twice As Much As I Borrowed On My Student Loans, Pending
Changes Affecting Student Loans, Bankruptcy and Student Loans, Student Loans And Your Credit Report, Student Loans, Gifts.
