I own a 2002 nissan sentra gxe. Recently the MPG has gone down by at least 50%. Usually I get around 30mpg but now I only get 15 MPG. The service engine light been on for about a year and the code is a faulty O2 sensor but the MPG problem only happened recently. What can it be? It's also been hectic weather here and lots of bad roads with ice and snow, maybe it messed up something on the bottom of my car?

Also when my gas tank reaches to about 1/5 levels, the mpg is suddenly good again at 30mpg.

When I release the brake slowly, it would make a loud grinding noise like metal grinding against each other. I don't think it's the brakes

What could these problems be?

The significant drop in mpg could easily be explained by a bad oxygen sensor. Here's how to change the sensor:

https://www.askmehelpdesk.com/cars-trucks/faq-how-troubleshoot-repair-maintain-hondas-selected-other-vehicles-46563.html#post223376

Even though it was written for Hondas, the procedure is the same for most cars.

The grinding sound could easily be related to the brakes. Most brake repair outfits will inspect brakes for free. I recommend that you take them up on it--try Midas.