A $23,000 loan might not cover the sticker price for many new cars, but this is what the average student is said to pay to invest in an education through traditional or online college.  Recent changes in the federal government’s student loan program allow those who obtain online degrees to pay lower installments on these loans over a shorter period of time than they have been.

The changes aren’t exclusive to online degree-seeking students, and President Barack Obama called them “one of the most significant investments in higher education since the G.I. Bill”, the New York Times blog, The Caucus, noted.

The changes are part of the Health Care and Education Affordability Reconciliation Act of 2010 that Obama signed into law in late March. By ending fee-based, guaranteed agreements with banks and private lenders that issue student loans, the government expects to save an estimated $61 billion in taxpayer money over the course of a decade. The changes in part benefit the federal government’s “direct” student loans that typically don’t involve credit checks or collateral and generally don’t have to be repaid until after graduation. Students issued direct loans in 2014 and afterward are among those to experience the changes.

“To make sure our students don’t go broke just because they chose to go to college, we’re making it easier for graduates to afford their student loan payments”, Obama was quoted in the Associated Press report as saying. “By the end of this decade, we will once again have the highest proportion of college graduates.”

The United States currently holds the #14 slot in terms of college graduates worldwide.  President Obama wants the country to rise to what is presently South Korea’s top position, according to a CBS News report. To help make college online and otherwise more affordable, the federal government each year provides students with grants, loans and work study program offerings. More and more students are said to be enrolling in college, online college offerings make college more accessible and online degree programs are offering a greater variety of choices. Many students, as a result of the economy, are also said to be seeking tuition assistance.

Participating colleges and universities award students the government’s direct Stafford and Perkins loans. The Perkins loan, which is based on financial need, is awarded in part based on income and assets. Perkins loans are available at 5 percent interest rates, and the government pays the interest while students are enrolled in college online at least half time. Stafford loans, with interest rates said to be as low as 5.6 percent or less, can be “subsidized” for students with financial needs. With subsidized Stafford loans, the government again pays the interest as long as a student is enrolled in college online at least half time.

Where direct loan recipients have had to devote 15 percent of their income to payments, those who receive loans after mid-2014 need only dedicate 10 percent to those payments. Loans can reportedly be forgiven after 20 years or less, rather than as many as 25 years, in instances where students make timely payments.

The grants for online college changes are to also benefit federal grant recipients and community colleges, as well as online college classes. Savings are to be passed on to community colleges to help pay for education and career training programs and to expand federal Pell grants that qualifying students with financial needs don’t have to repay. If you are interested in getting more information about online college course, check on the internet.