The quantity of incorrect material in relation to student loans is amazing. Part of the problem is that the media goes for a headline that will get viewers and it rarely is the whole story. You observe it all around you, some sensationalized headline shouting at you, yet when you read the actual article you see that there's little to sustain the headline. The press has come to be all about ratings (read money).

The new student loan modifications that were included in the Healthcare Reform Bill is a good example. The reason it was included was to assist to counteract the expense of health care. How? By taking the loan guarantees away from lenders (thereby not having to pay all the delinquent student loans) and directly obtaining the interest coming from student loans. They basically took out the middleman who was guaranteed to not lose money and got all the profits from the interest rates on these financial products.

And thanks to the interest fees being so low to banks and other lenders (like 1%) and now obtaining a guaranteed interest rate of at minimum 4-1/2%, that is a lot of money changing hands. The private lenders get even more because their rates are sometimes double the federal government fees. Student loans are big business and even with a higher delinquency rate, it's still a strong area of activity regardless of the economy.

Ok, let us get into the major misconceptions about student loans now that the government has changed many of the basic rules. I'm not really certain how these misguided beliefs ever got started considering that the language is very basic and easy to understand in the new bill. And rumors and controversy never tell the full story.

Student Loans Will At this point Be A lot more Expensive!

The biggest modifications involved extending and reducing the amount of payments following graduation. The bill lowered the installments from 15% of discretionary earnings to 10% and loans can be forgiven now at 20 years rather than the 25 years as it was before this bill. Consequently these alterations truly made it a lot easier and more affordable during the pay back period.

Available Financial Aid Will Be Decreased!

Financial Aid includes quite a few aspects from grants, private subsidized scholarships, college or university grants and discounts, and student loans. Due to the less than stellar economy there has been a decrease in private grants and similar plans but that had absolutely nothing to do with any government student loan changes. Student loans have always been the predominate method of student financial aid and remain readily available just as they were before any adjustments took place. You won't know what you might qualify for until you go to your college Financial Aid Office and let them evaluate your particular situation.

I Simply can't Qualify For Financial Aid Because of My Parents Income!

Some Financial Aid is based on need and economic status of your parents. But almost all colleges evaluate the whole picture and not just the income levels. Even if the parents make a good salary they may perhaps have 3 children in school or even high medical expenses or other factors that limit their ability to pay for college or university. And quite a few scholarships or grants are dependent on achievements, not financial status. Private grants and subsidized programs are based on other requirements than economic requirements (a great example is if you or your parents work for a company that offers financial aid for college). It is really suggested that any individual who is attending college go to their Financial Aid Office and let them figure out what you qualify for since they are the most reputable source.

The most important consideration on financial aid is that just about every university may have different programs and resources. And the best way to find out the facts would be to go find out at your college's Financial Aid Office. The schools are the very best source for any kind of financial aid and will work with you to find any that you qualify for from all possible resources.

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The amount of incorrect information about student loans is incredible. Part of the problem is that the media goes for a headline that will get viewers and it rarely is the whole story.

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