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The College Student Relief Act (H.R. 5), recently approved in the U.S. House of Representatives, currently is awaiting approval by the Senate. The act, which proponents claim will benefit taxpayers, may not have the impact that backers claim. Essentially, H.R. 5 encourages schools via incentives to go with the government’s Direct Lending Program over the Federal Family Education Loan Program (FFELP).

This is being pushed even though the Direct Lending Program has been operating at a deficit since 1997. Currently, the Direct Lending Program only has $89 billion in student loans, but owes the government $105 billion, a shortfall of $16 billion. Opponents of H.R. 5 are concerned, as they realize that taxpayers ultimately will end up picking up the $16 billion tab.

FFELP Saves Students Thousands

The FFELP, established by Congress more than 40 years ago, allows students to choose lenders based upon such criteria as customer service, incentives such as interest rate reduction, and other factors. Private lenders, including savings and loans, credit unions and banks, provide federally secured low interest student loans for college students that include: Parent Student Loans for Undergraduate Students (PLUS), Graduate PLUS Student Loans, Federal Subsidized Stafford Student Loans, Federal Unsubsidized Stafford Student Loans, and the Federal Student Loan Consolidation Program.

Through subsidies provided by the federal government, private lenders pass on savings to students in the form of student loan incentives. These benefits form the basis of competition in the student loan industry, offering potential savings of thousands over the course of a student’s loan in order to win a borrower’s business. When private lenders compete within the context of the FFELP, students win with greater savings. For instance, NextStudent, the Phoenix-based premier education funding company, provides a 1 percent LOCKED interest rate reduction once a borrower has made 36 on-time consecutive payments, one of the most aggressive benefits in the industry.

College Student Relief Act Doubles Costs

If the College Student Relief Act becomes law, students may be adversely affected. It will cut in half the subsidies paid to FFELP lenders, effectively doubling the cost required to service these student loans. Over time this will reduce the number of FFELP lenders, and ELIMINATE competition. This will negatively affect customer service, information about financial aid, and benefits passed on to students through student loan incentives.

Many students and their parents until recently were not aware of the adverse effects of the College Student Relief Act. Some have decided to take action, and, in essence, fight for their rights to save by contacting their senators, and asking them to vote against H.R. 5. Find your senators’ contact information here: http://www.senate.gov/general/contact_information/senators_cfm.cfm. Every little bit helps to protect the integrity of quality financial aid in the United States.

NextStudent believes that getting an education is the best investment you can make, and it is dedicated to helping you pursue your education dreams by making college funding simple. Learn more about student loans and student loan consolidation at NextStudent.com.

Once you make the decision to return to school and pursue higher education, you are faced with a few choices. You have to find the perfect program that is the best fit for you and your career goals. But then you are left with the dilemma of how exactly do you pay for your online degree.

It is important to note that while the rates for tuition for most online degree programs are roughly the same as they are for on campus degree seeking students, which can range anywhere from around $200 per credit hour to upwards of $500 or more per credit hour, the general expenses associated with an online degree verses a traditional approach are often lower. Since most of the course material is usually available online you do not have to worry about unrealistic prices for academic texts. Furthermore, transportation costs, taking off of work to attend classes, or any of the other general expenses associated with life on campus are not a concern. Therefore, in the long run, the total cost for your online degree may well be cheaper than a more traditional route.

Regardless of the final cost, you still have to manage to pay for your degree, which is made somewhat easier by the fact that pursuing an online degree means that you are able to keep your current employment. Many universities, such as the University of Saint Mary offer flexible payment plans and a Tuition Management System that could allow you to break down your tuition into monthly payments.

There are also other routes to help you finance your education. If your online degree program is accredited then you will most likely be able to apply for financial aid. The application to apply for financial aid is free and it is a fairly simple process. The admissions advisor for your selected program should be able to help you obtain an application. Most federal and state financial aid happens to be need based so if you are having trouble meeting tuition you may qualify for a Pell grant. In additional to standard aid, most students are also eligible for student loans. To qualify for Federal financial aid you must be a U.S. Citizen or legal resident, be enrolled in a degree seeking program at least half time (which is for six credit hours), and not be in default of any prior student loan.

There are also several companies that offer educational loans for students regardless of the income. A few examples of companies that include alternative financing include the Bank of America “Gate” loan , Mae “Excel” Loan , Sallie Mae “Career Training” Loan , and SunTrust “eMax” Education Program. Every loan program may be slightly different so be sure to check with the one you are interested in for more details. Between the payment plans, and possible grants or scholarships available you are sure to find a means to cover your educational costs. And many universities, such as the University of Saint Mary have a commitment to making sure that anyone who has the desire to attend a degree program can find a way to do so. So explore you options, and pursue your dreams.