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Debt in the United States. In the United States, student loans are a form of financial aid intended to help students access higher education. In 2018, 70 percent of higher education graduates had used loans to cover some or all of their expenses. [1]
Specifically, the borrower must be a "new borrower" as of October 1, 2007, and have received a disbursement of a Direct Loan on or after October 1, 2011. A borrower is a "new borrower" if, when receiving a federal student loan on or after October 1, 2007, the borrower did not have an outstanding balance on another federal student loan. [2]
The pandemic-era relief provided by the student loan payment moratorium ended in 2023, and by 2024, borrowers were back in the routine of paying their college debt — with interest.
Federal student loan interest rates are established by Congress and listed in § 20 U.S.C. § 1087E(b). Because the interest rates are established by Congress, interest rates are a political decision. In 2010, the federal student loan program ran a multibillion-dollar "negative subsidy", or profit, for the federal government.
The application process for federal student loans is separate from the private student loans application process, and the lending terms tend to differ between the two.
If your employer offers this benefit, they’ll match any student loan payment you make with an equal contribution to your 401(k). “This is a new benefit that can be offered by employers ...
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