Thursday, November 12, 2009

Paying for College 101

By Jorden Meltz

The past year and a half has affected the finances of everyone and the impact it had on colleges was no different. Creditors have begun to downgrade some Universities debt and now nearly one in every three private universities in planning for a decrease in tuition for the next year. This comes after the Student Aid and Financial Responsibility Act was passed in September, which will now eliminate college and universities need to rely on private sources for student loans and instead the loans will now come directly from the government. In response, Bank of America has suspended its federally-backed student loan program, as the U.S. prepares to phase out the Federal Family Education Loan Program. The new act will help to further ensure that families in need of loans to pay for college will have access to them through this federally backed program. The act comes as no surprise as the past year has seen both a decline in private sources making themselves available to give loans and a heavier reliance upon federal loans. Although students will not receive better interest rates on the loan, the act helps to make sure their is a larger pool of money to make loans with and that a greater number of people will have assistance in paying for their education if they need it.

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