Why student Debt Consolidation Loan is so popular?
1. Limits on federal student loans:
The total amount of loan can be issued to an undergraduate is $23,000 and it is unchanged since 1992. The college expenditures have increased to 135%. The amount of aid available for low-income students has also stagnated. The maximum Pell Grant, the most common form of direct federal aid for low-income students, is $4,050, a sum Congress hasn’t raised since 2003.
2. Aggressive marketing.
Many websites are offering loans through Internet and it is very easy to reach needy students.
3. Parents are under financial pressure:
Parents of undergraduate students can supplement their children’s aid and loan packages with a federal Parent Loan to Undergraduate Students, or PLUS loan. PLUS loans carry a fixed rate of 8.5%.
4. Private lenders claim the long-term payback of a college education is worth the extra cost of a private loan.
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