Reuters reports today that student loan demand is at a record high.
It would convert all new federal student lending to the stable, effective and cost-efficient Direct Loan program beginning July 1, 2010. All new federal student loans would be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy.
Given the Reuters' report it is rather unsurprisingly that the Chronicle of Higher Education reported today that the cost of college is a big worry of freshmen according to a national survey. The Chronicle on Higher Education says:
Unprecedented growth in student loans over the past two years is raising questions about whether a generation will be saddled with debt before it has even entered the workforce, according to data that the Equifax Inc credit bureau provided exclusively to Reuters.With this increase in student loans, students should know their loans are reliable and not subject to the whims of a volatile market. The Student Aid and Fiscal Responsibility Act would do just that for federal loans.
The number of U.S. student loan accounts has risen 29 percent to 69 million over two years, according to Equifax, while balances have jumped by $105 billion to $527 billion.
"We've never seen this high student loan activity," said Dann Adams, president of Equifax's U.S. Information Systems.
The demand for student loans results from college graduates pursuing advanced degrees because of high unemployment. Also, parents' depleted savings mean more college-age children are forced to take on debt.
It would convert all new federal student lending to the stable, effective and cost-efficient Direct Loan program beginning July 1, 2010. All new federal student loans would be originated through the Direct Loan program, instead of through lenders subsidized by taxpayers in the federally-guaranteed student loan program. Unlike the lender-based program, the Direct Loan program is entirely insulated from market swings and can therefore guarantee students access to low-cost federal college loans, in any economy.
Given the Reuters' report it is rather unsurprisingly that the Chronicle of Higher Education reported today that the cost of college is a big worry of freshmen according to a national survey. The Chronicle on Higher Education says:
Financial concerns, from paying for college to job prospects, dominated the new-student experience in 2009, according to an annual survey on freshman attitudes.The Student Aid and Fiscal Responsibility Act would invest the bill’s savings in making college affordable and helping more Americans graduate. It would invest $40 billion to increase the maximum annual Pell Grant scholarship to $5,550 in 2010 and to $6,900 by 2019. Starting in 2011, the scholarship will be linked to match rising costs-of-living by indexing it to the Consumer Price Index plus 1 percent. It would also strengthen the Perkins Loan program, a campus-based program that provides low-cost federal loans to students, by providing the program with more reliable forms of credit from the federal government and expanding the program to include significantly more college campuses. Finally, it would keep interest rates low on need-based – or subsidized – federal student loans by making the interest rates on these loans variable beginning in 2012. These interest rates are currently set to jump from 3.4 percent to 6.8 percent in 2012.
About two-thirds of freshmen said they were either somewhat or very worried about their ability to finance their college educations. Those citing "some" concerns about money increased about two percentage points, to 55.4 percent, while students citing "major" concerns remained at 11.3 percent, about the same as in 2008.
