Government Programs to Pay Off Student Loans

Introduction: Government Interventions and Policies to Student Loans

Because of the effects of the global economic crisis as well as trends in globalization, high technology, and job specialization, education has never been more valuable today than in recent years.

International economies are slowly recovering from the effects of recession by revitalizing industries, rehabilitating insolvent and bankrupt companies, and reorienting its management of human capital. Globalization has launched the free exchange of new ideas, innovative technologies and specialized services. Competition in the labor market has intensified, thus heralding an already-saturated highly-skilled and specialized workforce.

A good education opens you up to better job opportunities, a more stable employment, a higher income and a better life. It enables you to learn new ideas, acquire specialized skills, and adopt more meaningful behaviors. A good education prepares you so you could face the challenges of real life.

However, not all of us can afford a good education. Some of us live in a constant state of poverty and would need to have a part time job or a loan. Some loans are difficult to pay off so this resulted to government paying off student loans. With this, government has formulated specific interventions, policies and programs to help pay off student loans. This, in turn, provides you with the opportunity to get a good education and be more successful in real life!

Programs For Government Help To Pay Off Student Loans

There are many ways for government pay off student loans. Government’s solution to paying off your student loans are Federal Student Aid Programs in the form of various grants, campus based aid, Stafford loans, PLUS Loans or parent loans, and PLUS loans for professionals and graduate students. The U.S. Department of Education Federal student aid programs are the largest in America. Right now, these programs offer students more than $100 billion a year in loans, grants and work-study assistance.

An educational grant, educational grant-in-aid or grant of fund is a sum of money appropriated by one level of government to be spent by a lower governmental unit or a student for education.

It is important to remember that to obtain a grant, you must meet certain specifications and standards. In general, these grants include: the TEACH Grant Program, Academic Competitiveness Grant, Federal Supplemental Enrichment Opportunity Grant, Federal Pell Grant and the Federal Supplemental Education Opportunity Grant.

The TEACH Grant Program was enacted through the College Cost Reduction and Access Act of 2007 by the U.S. Congress. It offers you up to $4000 per year to low-income students who agree to serve as a full-time teacher in a high need field like math, science, special education, foreign language and English Language Acquisition.

The Academic Competitiveness Grant (ACG) provides $750 for the first year of study and $1,300 for the second year for students who have already availed of the Federal Pell Grant. A Federal Pell Grant, not like a usual loan, does not need to be repaid. Peel Grants are usually given to undergraduate students who have yet to earn a bachelor’s or professional degree. The maximum Pell Grant provides the maximum award of $5550, depending on financial need. The National Science and Mathematics Access to Retain Talent (SMART) Grant is for achieving students who excel in math and sciences.

The Federal Supplemental Educational Opportunity Grant (FSEOG) program, Federal Perkins Loans, and Federal Work Study are examples of Campus-Based Aid. The Federal Supplemental Educational Opportunity Grant, also unlike a loan, does not have to be repaid and is for undergraduate students in extraordinary financial need. You can receive $100 to $4000 a year, depending on the time of application, financial need, funding and the policies of the financial aid office of your school of attendance.

The Federal Perkins Loan is a 5% loan for undergraduate and graduate students in extraordinary financial need. Here, the loan must be repaid to the school. You may borrow $5500 (until a total of $27000) per year for undergraduate students and $8000 per year (until a total of $60000) for graduate students. The Federal Work-Study allows part-time community service and course-related jobs to undergraduate and graduate students for them to pay for their education expenses.

Stafford Loans generally include: Federal Family Education Loan (FFEL) and the William D. Ford Federal Direct Loan. Your parents can avail of PLUS Loans for their children or dependents. PLUS Loans are also provided to graduate and professional degree students.