Government Student Loans - Cutting Out the Middle Man

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No matter how you feel towards the president, he is president and he with the vice president are putting together ways to try to make education more affordable for the middle class Americans.

One of the bills that is moving into the senate after being passed by the house is the bill concerning government student loans. This bill will in essence cut out the middle man in lending, i.e. the banks and private lenders. This is projected to free up an estimated $80 billion dollars over 10 years and half of that, or $40 billion, will be directed into the Pell Grant program.

This bill will originate all new federal student loans through the Direct Loan program starting in 2010, 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 affordable college loans, at the same low interest rates, terms and conditions, no matter what happens in the economy.

If you would like to find out more on how this bill will help families and students just go here.

Plus this grant would also help streamline the FAFSA application process, which seems too cumbersome to some students.