Having a college degree can offer many opportunities, but it can also come with a hefty price tag. The cost of college has skyrocketed over the past few decades, beat inflation and making it difficult for Americans to afford higher education.
According to one, money is the biggest reason college students drop out of school. a recent study University Professional and Continuing Education Association (UPCEA). Two in five (42%) college dropouts cited financial reasons for leaving school, higher than the percentage of students dropping out for other reasons such as family commitments (32%) and health reasons (15%).
Financial problems are an even bigger problem for low-income students, according to Dr. Amy Smith, chief learning officer at online education company Straightline. The study showed that nearly two-thirds (65%) of those who dropped out of college had a household income of $50,000 or less – compared with less than 2% of those with incomes above $100,000.
“Another important point is that most disadvantaged learners are working adults who make $50,000 or less, so they are operating on a very tight budget,” Smith said. “This is an important factor that colleges and universities should think about when re-engaging students.”
If you’re considering leaving school for financial reasons, keep reading to learn more about how you can pay for college and complete your degree. go to trusted Compare Private Student Loan Rates across multiple lenders, so that you can find the best possible offer for your financial situation.
Bridge financing can help students who can’t afford college
Issues loans, scholarships and grants through the federal government Free Application for Federal Student Aid (FAFSA). But federal student loans may not cover the full cost of going to college because of annual borrowing limits, potentially leaving students on the hook for expenses such as room and board.
here are the current Federal Direct Loan Lending Limit,
- Dependent graduate students: $5,500 for the first year of enrollment, $6,500 for the second year, and $7,500 for the third year and beyond. The total borrowing limit is $31,000 for the entire graduate term.
- Independent graduate student: $9,500 for the first year of enrollment, $10,500 for the second year, and $12,500 for the third year and beyond. The total borrowing limit for the entire graduate term is $57,500.
- Undergraduate and Professional Students: $20,500 per year. The total borrowing limit (including the graduate loan) is $138,500.
Students who have exhausted their federal financial aid awards may have considered dropping out, but it is not the only option. If You Can’t Afford College Tuition, You Might Consider Bridging the Financial Gap Federal PLUS Loan or Private Student Loan,
If you’re considering borrowing a private student loan to help pay for college, visit Reliable Compare interest rates for free without affecting your credit score. Viewing your offers can help you decide whether this financing option is right for you.
Private Student Loans Vs Direct PLUS Loans
Federal PLUS loans are held by the federal government, whereas private student loans These are issued by private financial institutions such as banks and online lenders.
The Office of Federal Student Aid (FSA) offers two types of loans for students who need more money to continue their education: Parent Plus Loan And graduate plus loan, Parent PLUS loans are provided to parents of graduate students, while Parent PLUS loans are available to students who are enrolled in graduate school or another professional program.
Unlike Parent PLUS loans, private student loans can be borrowed directly by graduate students. This could make it possible for students to bridge the college funding gap without relying on their parents to borrow additional loans. Here are some other notable differences Federal PLUS Loans and Private Student Loans,
- Private student loan eligibility is based on the creditworthiness of the borrower, such as credit score and debt-to-income ratio, Students can consider enlisting the help of a cosigner to lock in better terms, like a lower interest rate.
- the current Federal PLUS Loan Interest Rate For loans generated before July 1, 2022, it is 6.28%. The average private student loan rate is 5.89% for 10-year fixed-rate loans and 3.26% for 5-year variable-rate loans, according to reliable,
- Private student loans are not eligible for select government benefits such as income-driven repayment plans (IDRs), administrative forbearance periods or federal student loan forgiveness programs.
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