College costs: Understanding federal regulations

Growth in higher education led to the federal government providing student loans

Huffington Post reports: As more Americans pursued higher education, the federal government started to offer federal loans to students in 1958 so they could afford their educational pursuits.

Check out the history of student loans in the federal government here: Huffingtonpost.com

As the cost of education increases, debt from student loans a burden to many Americans

American Student Assistance:  As the cost of college tuition drastically increased, students needed more loans and are having more trouble paying them off.  Today, more than 37 million Americans have outstanding student loans and the total debt from student loans in the U.S. has reached $1 trillion.

Check out the facts here: Asa.org

2007 legislation worked to decrease student loan rates

U.S. government: To ease the burden on students by making it easier to pay back loans, President George W. Bush signed the College Cost and Reduction and Access Act in 2007, which worked to gradually reduce the rates for student loans from 6.8 to 3.4 percent over a five-year period.

Check out the College Cost and Reduction Access Act here: Govtrack.us

Summer 2013 brought changes to student loan rates

Washington Post reports: The college cost law was set to expire on July 1, 2013. As the deadline approached, Congress scrambled last summer to come up with a new deal to keep student loan rates at a low level.  But when July 1 passed without a deal, student loan rates saw a huge increase, doubling to their previous rate of 6.8 percent.

Check out what happened during the student loan rate increase here: Washingtonpost.com

July 31 deal made to fight the student loan rate hikes

Huffington Post reports: On July 31, Congress reached a bipartisan deal bringing the student loan rates back down.

Check out what happened on July 31 here: Huffingtonpost.com 

What the new rates for students are

Federal Student Aid: The law reduced student loan rates to 3.86 percent on unsubsidized and subsidized loans for undergraduates.  For graduate students, the rates became 5.41 percent for unsubsidized loans and 6.41 percent for PLUS loans. If undergraduate students or graduate students took out a Perkins Loan, the repayment rate would be 5 percent for both.  The U.S. Department of Education provides the loan rates for all the different loan types and gives explanations of how they work.

Look at the loan rates and how they work here: Studentaid.gov  

What these rates really mean for students

CBS News reports: With the difficulty of sorting through all the different loan rates, CBS News gives tips for helping students sort through the numbers to better understand what the new legislation will really bring.

Check out the six things to know about the new student loan rates here: Cbsnews.com 

College debt crisis crippling students

Forbes reports: The average student graduates with $26,600 of debt. The total student loan debt is higher than $1 trillion and continues to climb. That translates to about 6 percent of the total U.S. national debt of $16.7 trillion. The majority of student loans are backed by the U.S. government and when students put their payments on hold, also known as deferment, everyone gets hit.

Get the full story at forbes.com

—Links compiled by Angela Hensel

 

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