Not all students are fully aware of the future of his or her student loan debt. A recent policy change may affect students, but what does this mean for students of today? Most are only aware that one day the debt will have to be paid back, with little knowledge of what actually happens after his or her educational career ends.
The government has recently taken control from the banks to issue and control distribution of student loans. Under the new policy, which mostly takes effect starting the year of 2017-18, Pell Grant maximums will be awarded in higher amounts, interest rates will be down .6 percent and the “forgiveness” period of outstanding continual balances will be dropped from 25 years to 20. This is good news to individuals in the early years of school or anyone who is looking to continue their education, yet numbers and percentages don’t always register with students until they reach graduation and beyond.
University of Utah graduate, Kimberly Mahoney, 34, first received financial aid her third year of college. After help from her parents the first two years, she was left to find other means of funding.
“I didn’t know what financial aid was or how beneficial it could be,” she said.
Mahoney explains that without financial aid she may not have had as successful a college career, allowing her to live off student loans and pay for school without financial support from her parents.
Mahoney was unaware that the policies have changed, but hopeful that the new “forgiveness” part of the policy will affect her, since she is still paying off loans.
It’s important for students to know how the repayment of loans works after graduation. Mahoney has been paying an average of $200 a month since graduation. In regard to the $200 a month average, Mahoney said, “In the end, it is worth the benefits that have come with an education.”
Resources are available to educate students as they go through the process, both while in and out of school. Visit studentaid.ed.gov or call the Federal Student Aid Information Center at 1-800-4-FED-AID for help.