One of the dominated conversation topics of higher education within the United States is: Student Financial Aid.
A staggering 1.76 trillion-dollar total amount of student loan debt shared by 45 million Americans as of the current and, in an effort to lessen the severity of the growing debt to bubble, the current administration of President Joe Biden introduced the student loan forgiveness program.
WASHIGNTON (WREX) — A new bill would give the ability for struggling borrowers to seek a bankruptcy discharge for federal student loans after a waiting period of ten years. (Photo by: Kenzie Dillow)
What is Federal Student Loan?
A federal student loan enables individuals to obtain loans from the federal government directly in order to cover the costs of attending college. It is also the largest provider of student financial aid for college in the United States.
Read More: Student Loan Forgiveness: Updates Of The Program
What are the Types of Student Loan or Student Financial Aid?
There are three distinct types of student loans:
Direct Subsidized Loans – loans cater to those who demonstrate financial need, as determined by federal regulations.
Direct Unsubsidized Loans – a form of student loan that is granted based on a school’s assessment of the costs you will incur based on the cost of attendance and other financial help one obtains and is not based on financial need.
Direct PLUS Loans – these loans, which are intended for guardians or parents who want to pay for a student’s education, typically cover the remaining costs of attendance after scholarships.
Students from George Washington University wear their graduation gowns outside of the White House in Washington, DC, on May 18, 2022. – US Senator Raphael Warnock (D-GA) is expected to meet with President Biden to push for student loan forgiveness. (Photo by Stefani Reynolds / AFP) (Photo by STEFANI REYNOLDS/AFP via Getty Images)
What is Student Loan Forgiveness Plan? Who and what shall qualify?
Student Loan Forgiveness Plan, aimed to provide up to 20,000 dollars in debt relief for those making less than 125,000 dollars and who met the other eligibility criteria.
The US Supreme Court ultimately blocked it, and it is currently being discussed as those in favor of and opposed to the move argue over its legality. Despite this, thousands of Americans still rely on government funded scholarship programs to pay for their living expenses and college tuition while they work to advance their economic status.
How is Student Financial Aid calculated?
After meeting the eligibility criteria, a simple formula is use to determine the student financial aid you will receive.
The Expected Family Contribution, your family’s assets, perks, and income, both taxable and untaxed, are removed from the Cost of Attendance to calculate your financial need.
Read More: Student Loan Forgiveness: More Borrowers May Get $0 Payments Under New Plan
