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Students are highly ignorant about financial aid, report says

College financial aid is ubiquitous these days—American students hold about $1.5 trillion of it, all told—and yet aspiring college students are highly ignorant about it, according to a new report.

The study, by the ACT Center for Equity in Learning, revealed that “an overwhelming majority  of 11th and 12th graders…were unaware that the government will pay their interest on existing loans while they are still in college,” according to a report in Bloomberg.

“From 67% to 70% didn’t know about a program that allows students to repay loans slower, based on how much money they make after college,” the article states.

The commissioners of the report stressed the necessity of educating students on the various aspects of financial aid.

“Students did not understand basic information about the student financial aid and repayment processes, which may limit their abilities to access aid. Debt-averse students may need additional information about the value of undertaking some (but not too much) debt, as well as about the effects of different in types of debt and repayment options on students’ ultimate debt load and ease of repayment,” the study declares.

“It is vitally important that high schools and colleges do a better job of clearly explaining all options related to available student financial aid—preferably non-loan aid—and the long-term consequences of student loan debt,” it continues.

Read the Bloomberg report here.

IMAGE: pathdoc / Shutterstock.com

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