A college education may be the most important investment in a child’s life and has become one of the most costly, too. The publicly reported tuition charged by private colleges and universities for can reach $50,000 or more a year. The trends are alarming, too. And while tuition at public universities is generally lower, costs there have been growing even more steeply in recent years as government support has lagged.
So it is no wonder that more students and their families are borrowing ever larger amounts to pay for college. In the 2008-2009 academic year, they took out more than $95 billion in loans, both federally guaranteed and private.
But understanding how student loans work is not easy, and the unwary borrower can end up paying a high interest rate for years after graduation. For the millions of students who will need to borrow to pay for college, it makes sense to learn about the financial aid system even before applying.
The landscape for loans is about to change. Included in the legislation that completed the health care reform package were provisions to force commercial banks out of the federal student loan market, cutting off billions of dollars in profits in a sweeping restructuring of financial-aid programs and redirecting most of the money to new education initiatives.
Financial aid to help pay for college or career school can come from the U.S. Federal Government, the state where you live, the college you attend or a non profit or private organisation.
This video shows an Overview of the Financial Aid Process in the USA.