Government Debt Could Affect Students in a Big Way

Even the United States government isn’t immune to debt and this is a problem which is all over the news of late. Not only can the government not meet their current debt, but it also looks as if there is a possibility they will go into even greater debt all in the name of stabilizing the economy. Perhaps someone in Washington should have been looking at the government’s annual credit report!

U.S. Economy Cause for Concern in Foreign Markets

Not only are Americans worried about the state of the economy, but foreign nations are also a bit concerned. Those who are especially vigilant in watching what is going on here would be countries such as China to whom we are in debt. The growing concern is that the United States will default on its debt which has a rebound effect throughout the entire world. But what does this say to those of us who are concerned about going to college and the availability of government grants and guaranteed student loans?

Some Grants Already Cut

Although students who will soon be going back for the fall session have already been told what the amount of their Pell Grant will be, there is still concern as to whether or not that money will be available. Summer Pell Grants were already cut which led many students to fall behind in their certification programs while others will need to finish up a degree program after the fall session. More and more students are inundating the financial aid offices of their colleges and universities looking for information on whether or not they will be getting their money which is necessary to continue on in their education.

Uncertainty Grows in the Department of Education

According to  CNN Money, the Department of Education is trying to work as closely as possible with the Treasury Department in order to get particulars on how the present state of the economy will affect students who rely on government aid to pay for their education. It is this growing uncertainty which should be teaching us all a lesson.

The Importance of Good Credit Standing

Consider the worst case scenario. What would happen to your college age children if the government did default on their debt and were unable to offer adequate funding to those students who rely on it to pay for tuition, books and even the cost of living? As parents we may not have adequate credit standing to take out a personal loan or even a secured home loan which is based on our credit score and credit history. As is evidenced by the current crisis in the United States government, defaulting on debts would almost certainly affect future credit.

Taking Steps Now to Avoid Future Problems

Even though there is some amount of optimism in the short term, these problems may not soon go away. Parents are advised to keep an eye on their own credit scores by requesting a free annual credit report from the three reporting agencies. Take care of debt problems now in the event that government funds will not be available in the future to help put your children through college.

By requesting your free credit report from the three reporting agencies, Experian, TransUnion and Equifax, it is possible to begin repairing bad credit before it gets any worse. Whether you have fallen behind on bills, have been the victim of identity theft or simply have erroneous marks on your report which can easily be remedied, you can’t begin to fix what you don’t know is broken! Your child’s academic future may very well depend on your credit score if the government is unable to continue offering current grants and student loans.

 

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