Student school loans

Student school loans

by John Tahan

Loans are granted to students to help them to finance their studies. They are increasingly numerous demands among students regarding loans. Banks have adapted different formulas to suit students' needs when it comes to financing their inscription expenses, books, room and board, and all expenses related to education. Most school loans have an interest rate of 2.9% to 6%, banks are usually giving better interest rates to students of bigger schools like; engineering, medical or commerce establishments because most of these school institutions are partners with banks. Tuition rates are on the rise at many colleges; the limits that students can borrow from year to year are stable and remained the same. Undergraduates dependent of parents are allowed to borrow up to $2,625 their freshman year, $3,500 their sophomore year and $5,500 for each remaining year in Stafford Loans. Students that are Independent from parents can qualify for additional unsubsidized loans. Dependent students may also receive unsubsidized loans depending on the financial situation of their parents. Unsubsidized loans are helping in some situations but the down side of it is that students aren't getting interest free benefit with these subsidized loans. The limit of $23,000 loans for an undergraduate education has not increased since 1992. On the other hand, tuition rates have increased at a fast rate, in fact the rates more than doubled. Tuition rates increase a lot more than the inflation rate. A percentage of about 8% per year is registered. Not to mention that inflation has caused prices for students other expenses such as; housing, meals and other day to day expenses to increase dramatically. Many colleges dramatically raised their tuition rates by 28%. The public universities average tuition is $4,694.00 per year for in state residents. Student loan limit doesn't even cover tuition costs.