The credit crunch has deterred many who want to go to college but the federal government has once again risen to the occasion. Undergraduates are now able to borrow more money from one of the cheapest federal loan programs, cutting interest rates for needy students. This is very helpful for parents who are strapped for money because of the economy. Many parents who are losing their jobs and about to face bankruptcy because of lack of employment no longer can support their college bound student. The federal government is very much in tuned with this problem and does not want to waist good minds that are the future of the country.
The new federal rules increased the amount of money that almost every full-time undergraduate will be able to borrow from the federal Stafford program. The full-time undergraduate will be able to borrow at least $5,000 more under the new guidelines helping them to complete a semester. This is a great break for parents who are suffering financially. The upperclassmen will be able to borrow up to $7,500 which in some cases is needful at this time because of the rise in tuition and book costs. A student who is independent from their parents will be able to borrow at least $6,000 making their success for graduation even better. The interest rate is 6.8 percent a year and d percentage points in fees for a total annual rate of 7.25 percent. Some lenders are still waiving the fees and offering other small discounts even with the economy in the state that it is in.
Under the new guidelines set by the federal government parents are getting a break in payment flexibility. The parent can now take out a federal Plus loan which can cover their child’s full cost of attendance after considering other financial aid possibilities. The parent will be able to defer payments until six months after the student leaves school giving the parent a much better opportunity when it comes time to pay the loan back. The student can assist the parent in the pay back on the loan. Since the economy has been in such a state some parents find that their credit has run into problems but if they are rejected on the Plus loan program the student can borrow as much as $7,000 more a year through the Stafford program. Educational loans for students whose parents has a low or middle income are tax deductible another factor that is very helpful to aid in financing education.