Half of all full-time undergraduates in the United States take out federal student loans each year, adding up to about $57 billion per year, according to the College Board.
While many students and their families turn to loans to help finance their college degrees, the entire federal student loan system is under fire by the Obama administration and could be changing.
President Obama says the federal government is wasting money by paying banks to offer student loans, and wants to cut out what he calls the “middlemen” who cost taxpayers billions.
“It turns out that right now a lot of the student loan programs are still run through financial institutions and banks,” Obama said at a recent appearance. “So you got this middleman, and they get billions of dollars per year managing loans that are guaranteed by the federal government.”
Under the proposal, students pursuing a college education would borrow directly from the government. Loans from banks would also be available, but they would not be guaranteed and the interest rate would not be set by the government.
The government says the savings realized by the proposed change could be put towards other financial aid programs instead such as government grants.
Although, the plan passed through the House last year, experts say it will face a tougher fight for approval in the Senate.
February 26, 2010
very glad to see obama is living up to his stuff on education. we could really use it!!
February 26, 2010
The sooner the better!!!
March 8, 2010
I REALLY Need help financially 2 launch my life in the proper direction,hope I”TS EASY TO GET AID.
March 8, 2010
This is great but I am 40 yrs old with a bachelors in accounting but I want to go to nursing school and currently have a daughter that I am paying for loans for her and my student loan-I’m about student loaned out. There is no help out there for ppl like me.
May 9, 2010
I already have a student loan that I am behind with payments on because I don’t have a job. If I want to go back to school to complete my degree, am I still eligible to get financial aid?
June 22, 2010
How large of a loan would you need to take out for online college?
July 5, 2010
I too, am so glad that Obama is going to overhaul this student loan program, it really needs it.
July 7, 2010
I really, really want to go back to school and finish my education. I need financial aid, but am having a lot of trouble getting it.
July 9, 2010
What are the qualifications to get a student loan?
July 14, 2010
So with all of this information about the new financial aid packages that Obama has made available. It is really going to be any easier to get approved?
August 15, 2010
I have a desire to obtain a degree in Criminal Justice and I very much hope that it will be easy for me to get what I need to get that degree. I can really use it. Right now, all my children are grown, on their own, now I feel I need to do this for myself, for my own personal satisfaction and to seek rewarding employment. Just need to get all the information to start applying.
January 12, 2011
Hi Tammy. Student loan qualifications can vary. To receive aid most require that you demonstrate financial need, are enrolled in a degree or certificate program, are not in default on another loan, maintain satisfactory academic progress and several other factors.
February 27, 2011
Excellent article, I don’t have to go through as much paperwork when I pay my loans back.
March 1, 2011
Hey Elke. That is a great question. Most loans are based need-based or non-need-based, and sometimes students have parents co-sign or sign for the loans which can change the approval possibilities. There are many different factors that are taken into consideration for loan approval. The change in loans Obama proposed did not necessarily state it would make it easier to get approved.