Why Does the Federal Government Want to Help You?
Have you ever wondered why the Federal Government provides financial aid to students? It's because the government knows that education is invaluable to the country's economy. Studies show that for every dollar that the government invests in student education, three dollars return to the U.S. Treasury in tax revenue. Continue reading to learn why education is so important to the Federal Government.
If you have a college degree, or a more advanced degree, the U.S. Government realizes that you are far more likely to make a significant effect on society with your higher education than you would without your higher education. Moreover, the government knows you are going to be paying a lot of tax during your career after you graduate.
The U.S. Department of Education has reported that every $1 it invests in federal financial aid produces $3 in revenue for the U.S. Treasury in tax revenue! The U.S. Department of Labor reports that, according to the Bureau of Labor Statistics, 60% of new jobs created through 2010 will require a higher education. A college graduate means more tax revenue, greater productivity, increased consumer consumption, decreased reliance on government financial assistance, and expanded workforce flexibility for the American economy.
In addition to the economic reasons driving federal financial aid, there are historical forces as well. Before 1965, generally only wealthy students, students receiving scholarships, or students receiving aid under the G.I. Bill could attend school. In the late 1950s and 1960s, education became for all a political issue, and Congress responded with the Higher Education Act [HEA] of 1965.
The HEA authorized a loan program that provides guaranteed, low-interest loans for students to pay for post-secondary education costs. This program is known as the Federal Family Education Loan Program (FFELP), previously called the Guaranteed Student Loan Program (GSLP). The United States Government is eager to assist productive members of society who have made investments in their educations. Using EdFed, you can consolidate your federal educational debt in an extraordinary program that may save you thousands of dollars over the life your loan.
Retain your government benefits with an EdFed Consolidation Loan.
Because federal student loan consolidation is a government program, you are still entitled to benefits such as deferment and forbearance. Just like your current government loans, the consolidation loan is also government guaranteed and insured.
Please note that if you decide to consolidate a Perkins Loan, you will lose the interest subsidy on this portion of your debt. In addition, you will lose any eligibility for forgiveness of your Perkins Loan. However, the inclusion of a Perkins Loan into your consolidation loan may have a positive effect on the calculated average used to determine the interest rate on your consolidation loan. Please consult your EdFed loan counselor to determine the best option for you.
You can receive a deferment of the payments on your consolidation loan for certain defined periods. A deferment is a temporary suspension of loan payments for specific situations such as reenrollment in school, unemployment (up to 3 years only), or economic hardship (up to 3 years only). You have to apply to your loan servicer (the company that sends you your monthly bill) for a deferment, and you must continue to make payments until you've been notified your deferment has been granted.
Forbearance is a temporary postponement or reduction of the payments on your consolidation loan for a period of time due to financial difficulty. You may receive forbearance in the event you are not eligible for a deferment. In contrast to deferment, during forbearance, interest continues to accrue on your consolidation loan irrespective of the types of loans that were consolidated. Your may receive forbearance in intervals of up to 12 months at a time. You have to apply to your loan servicer (the company that sends you your monthly bill) for forbearance, and you must continue to make payments until you've been notified your forbearance has been granted.
Article Title : Why Does the Federal Government Want to Help You?
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By consolidating through EdFed, I locked in my current low interest rate, beating the rising rates. Then they went one step further and reduced it an additional 1.25% through their exclusive benefits. EdFed is the lender that takes consolidation one step further. - Jamal B. Atlanta, GA
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Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.
While you are attending school and after you graduate, be sure to establish and protect your good credit rating. Make all loan and other payments on time; use cash instead of credit cards; and monitor your spending habits.