The government has taken over the student loan market and students are loving it. Why? Student loan rates have never been lower this year, which makes paying for college much easier. 

In a much debated move, the Obama Administration put an end to the middleman system in the student loan arena. The system used to work by having the federal government back loans given by banks to students for their education. This made money for banks, but ended up costing students more via fees, higher interest rates and so on. 

The Obama Administration ended this approach by cutting out the middleman. The government now deals with students directly. This was supposed to create piles and piles of red tape. It may well in the future, but it hasn’t done so at this point. Perhaps even better, the lack of banking middlemen has resulted in a far better financial transaction for kids. 

To the surprise of many, student loans this year are one heck of a lot cheaper than they have been for decades. This is because the government has sliced the interest rates like a villain in the latest slasher flick. Let’s talk about some numbers. The interest rate on the Stafford loan dropped from 5.6 to 4.5 percent. That is a huge change. 

Even better, private institutions have reacted by dropping their rates as well. Sallie Mae is often thought to be a government agency, but it went private in 1997. It is now offering variable rate student loans with rates as low as 2.9 percent. It is also offering a plan wherein as long as you make payments while in school, you can cut the total interest paid by a staggering 50 percent. 

Critics suggested the government’ decision to get fully involved in the student loan industry would be a mistake. So far, it appears to be just the opposite at least as far as students are concerned.