The nation is still feeling the effects of the Great Recession even though economists report that it is over. Unemployment rates still hover at around 9 percent, the economy is the number one issue of concern for more and more Americans and political pundits are predicting a tough reelection campaign for Barrack Obama if things don’t change quickly.

One major sector of the country that is taking a major hit is students who graduate from a four year college burdened by debt just as they enter their careers. And with the economy being the way it is, many students can’t find jobs or jobs that pay well, so the debt becomes even more of a burden that can last for years. Many graduated students may find themselves having to default on their loans. That is not a very good way to start one’s adult life.

The average cost of a public four year college for a student who lives in-state is $7,605 a year. The average cost of a public four year college for an out-of-state student is $11,990 a year. And the average cost of a for-profit four year college is @27,293 a year. And that’s for the classes and room and board. There are other costs to attending school that are not covered. These include indirect costs like books, supplies, travel, personal expenses, eating off campus and more. All adding to the burden of the student.

As a result, many students graduate college with a student loan debt of $20,000. This is said to be a 108 percent increase in just 10 years. Even students who graduate from a two-year tech school find themselves with a $10,000 debt. In addition, graduate students who are trying to get a law or medical degree are being saddled with debts of as much as $100,000. It is said that the earning potential in the fields of medicine and law are directly relative to their debt. Yet these graduated students begin their careers doing so called grunt labor as residents or as aides to established attorneys. One can’t expect to make enough money to attack the debt early with jobs like that.

The U.S. Department of Education has recently released a report that says that recent student loan default rates are up close to 2 percent from the previous year. According to the report, for every student who graduated and who started paying a loan as of October 2008, 8.9 percent were not paying their loans by the end of 2010. That is an increase of 7 percent of students who have stopped paying their loan in comparison to 2007.

Some who have knowledge of this issue say that one major reason this is happening is that students who are getting the loans just don’t understand the loan process. In short, they are 18 year old financially illiterate high school graduates who don’t know how to finance their education. As a result they take out costly and confusing loans.

A major topic at a recent conference of the Florida Association of Student Financial Aid in Naples, Florida discussed ways to educate students about borrowing money. Moreover, the process of getting a student loan is becoming more difficult. It is being reported that fewer students of need are able to get Pell Grant loans because the current economic situation and the resulting tighter budgets are causing groups like Pell to offer less loans. States are also feeling the crunch. For example, in Florida, the Bright Futures scholarship program has had to reduce the scholarships it provides. Students in the top tier of recipients will get $3,030 next school year for a 30 hour course load. That is down 19 percent from the previous year.

And all of this is about to negatively impact the schools. New federal government rules just announced may cause many colleges from access to student aid money as part of a so-called crackdown against schools who are leaving their students high and dry with too much debt and doing nothing to improve their job prospects. The new rules include regulations that for-profit schools have to meet to get access to federal financial aid money. If graduates owe too much of a percentage of their income or too few graduates of a given school are paying back their loans on time, then that school could lose access to Pell grant money and other federal student aid. The result of this is that schools effected will have a more difficult time attracting students. This could be a major hit for a school because it is said that as much as 90 percent of a school’s revenue can come from government aid. According to the new rules, schools will be able to receive federal financial aid if at least 35 percent of its former students are paying back their loan. Moreover, the estimated annual loan payment of a typical graduate must not be larger than 30 percent of the graduate’s discretionary income calculated to be 12 percent of his or her total earnings.

Many believe that such rules will make it more difficult for minorities and students from low income families access to funding options and thus limiting the schools that they may be able to afford to attend.

There are grant programs available which will prevent a student from falling into the debt trap. There are grants available that are categorized as Student-Specific, Subject-Specific, Degree Level and Minority. Common sources for grants include the federal and state governments, colleges and universities, and public and private organizations.

Federal grant programs to check into include the Pell Grant, the Academic Competitiveness Grant, and the National Science and Mathematics Access to Retain Talent Grant. State grants include state administered grant programs. For example Michigan’s grant programs are designed to assist a cross section of students including general undergraduates, academically gifted students, low income and non-traditional adult students. Florida offers grants for the disadvantaged, disabled, Hispanics and “academically talented.”

Minority organizations also offer grants. There are African American Student Grant programs, Hispanic Grant programs, Native American Grant programs, and Asian-American Grant programs. There are also grant programs for women.

Moreover, there are groups that offer grants in a wider general category including Low Income and Disabled Students, grant programs for graduate students and doctoral candidates, grants for undergraduate students, and grants for military students and families.

Finally, there are subject specific grants, grants to get an education in a high need field like healthcare and teaching.

In conclusion, if you are in need of financing to go to college or graduate school, learn about the student loan process before you jump into it and, once you have a good idea how things work, research and study options including grant programs which provide you with money you are not expected to pay back.