Non federal student loans have given college students more options in financing their college careers. While it used to be that students were left with no choice but to take advantage of financial assistance provided by the federal government, they now have more choices with the presence of private loan providers. The volume of such loans has been steadily growing, with its movement notably higher than the increase in volume of federal student loans. If this trend continues, it is projected that private loan sources will surpass the student loan volume provided by the federal government by 2025.
Supposedly, general rules dictate that a student should only make non federal student loans an option once he or she has already maxed out his or her federal loan, usually the Stafford Loan. Before considering a private loan, they should also first submit the Free Application for Federal Student Aid (FAFSA), which may make them qualified for various forms of student aid like grants and work-study programs. Undergraduate students should also compare first resort to a Federal PLUS Loan, which is usually more affordable and has more flexible payment terms. Unfortunately, this is not the case anymore as more and more students try to get non federal student loans to cover for miscellaneous expenses, while they use federal loans for tuition costs.
What students and potential borrowers need to be wary about non federal student loans, is of course, its fees. As private businesses, these loan companies' primary goal is to maximize profit, even at the expense of students. Cruel as it may look, that's how businesses are structured. Thus, it is inevitable that fees charged by a majority of lenders are higher than their federal counterparts, making repayments bigger. A loan with a low interest rate but riddled with high fees can certainly cost more than a loan with no extra fees but has a somewhat high interest rate (which is what federal student loans are supposed to be). When finding non federal student loans, one should remember that fees at the 3 to 4 percent level would be about the same as a 1 percent increase in interest rates.
Among non federal student loans that would be favorable to students would be those that have an interest rate of LIBOR (London Inter-bank Offered Rate) + 2 percent or PRIME RATE - 0.5 percent with no included fees. Although these loans may be available, they may only be offered to borrowers that have good credit standing, and only around 20 percent of borrowers qualify as such.
Moreover, students interested in private loans should make sure they are well-versed about the fine print of these loans. Most of them are advertised at a low rate for grace period and in-school periods, but once the loan is already repayment period, the rate changes.
However, there are indeed loans for students provided by private businesses that would be very beneficial since there aren't really federal equivalents for them. These include non federal student loans for law students in the process of taking their state bar exams and relocation and residency loans for students in the medical and dental field who are in the midst of preparing for their residencies and board exams.
แสดงบทความที่มีป้ายกำกับ Federal Student Loans แสดงบทความทั้งหมด
แสดงบทความที่มีป้ายกำกับ Federal Student Loans แสดงบทความทั้งหมด
วันจันทร์ที่ 4 กรกฎาคม พ.ศ. 2554
วันพุธที่ 23 กรกฎาคม พ.ศ. 2551
Federal Student Loans For Those Starting College
Federal Student Loans For Those Starting College
by Devora Witts
You know that the government finances peoples college education in many cases and that a considerable amount of money is destined every year for this purpose, you just would like to know how to get a share of that and avoid having to resort to private lenders that charge higher interest rates. Within this article you may find some answers to these and other questions.
Federal Student loans are not the only source of finance for college, there are also other government agencies offering loans for students and private lenders willing to provide financial assistance to those undertaking college studies. However, there is no doubt that federal student loans are the largest source of funds for students and the first choice of any student with financial needs.
However, before applying for a federal student loan you need to understand fully the implications in borrowing money from the government and what benefits and drawbacks you will need to ponder in order to decide whether a federal student loan is the right loan for you or not.
Eligibility
In order to be eligible for a federal loan you need to be a U.S. citizen, some non U.S. citizens are also eligible but you need to check with the department of education for details on how to qualify. You need to have a high school degree or proof of advance education. And most importantly, you will need to show that you have no criminal records (especially records on drug abuse) and that you are truly in need of financial assistance.
These kinds of loans are awarded in consideration of the applicant's needs. Underprivileged students are more likely to get a federal loan than those who can resort to other sources of finance or can get further aid from their family. As regards to this last factor, the EFC (Expected Family Contribution) reflects your family's ability to contribute to paying for college and will determine how much money you can request.
Procedure
Applying for a federal personal loan is rather simple. You need to fill the corresponding form (FAFSA) that can be found at the department of education site or at many other online sites which also provide additional information on how to get approved for a federal student loan.
The government agency will evaluate your eligibility and you will probably be required to submit documentation backing up your statements. Of course, the documents you may be required to submit depend on the type of loan you choose. With the exception of unsubsidized loans, you will surely need to show proof of being in need of finance.
As a final note, beware of online sites that claim to show you how to get approved for federal loans even if you can get finance from other sources and you are not so in need of assistance. They can either be just a scam waiting to rip you off or worst, they may want you to submit false information to the government agency which constitutes fraud and implies that you can be legally prosecuted.
by Devora Witts
You know that the government finances peoples college education in many cases and that a considerable amount of money is destined every year for this purpose, you just would like to know how to get a share of that and avoid having to resort to private lenders that charge higher interest rates. Within this article you may find some answers to these and other questions.
Federal Student loans are not the only source of finance for college, there are also other government agencies offering loans for students and private lenders willing to provide financial assistance to those undertaking college studies. However, there is no doubt that federal student loans are the largest source of funds for students and the first choice of any student with financial needs.
However, before applying for a federal student loan you need to understand fully the implications in borrowing money from the government and what benefits and drawbacks you will need to ponder in order to decide whether a federal student loan is the right loan for you or not.
Eligibility
In order to be eligible for a federal loan you need to be a U.S. citizen, some non U.S. citizens are also eligible but you need to check with the department of education for details on how to qualify. You need to have a high school degree or proof of advance education. And most importantly, you will need to show that you have no criminal records (especially records on drug abuse) and that you are truly in need of financial assistance.
These kinds of loans are awarded in consideration of the applicant's needs. Underprivileged students are more likely to get a federal loan than those who can resort to other sources of finance or can get further aid from their family. As regards to this last factor, the EFC (Expected Family Contribution) reflects your family's ability to contribute to paying for college and will determine how much money you can request.
Procedure
Applying for a federal personal loan is rather simple. You need to fill the corresponding form (FAFSA) that can be found at the department of education site or at many other online sites which also provide additional information on how to get approved for a federal student loan.
The government agency will evaluate your eligibility and you will probably be required to submit documentation backing up your statements. Of course, the documents you may be required to submit depend on the type of loan you choose. With the exception of unsubsidized loans, you will surely need to show proof of being in need of finance.
As a final note, beware of online sites that claim to show you how to get approved for federal loans even if you can get finance from other sources and you are not so in need of assistance. They can either be just a scam waiting to rip you off or worst, they may want you to submit false information to the government agency which constitutes fraud and implies that you can be legally prosecuted.
วันพฤหัสบดีที่ 17 กรกฎาคม พ.ศ. 2551
What Are The Avenues For Consolidating Non Federal Student Loans?
What Are The Avenues For Consolidating Non Federal Student Loans?
by Ed Mitchell
Most people find that towards the end of their time at college they have what seems like an overwhelming amount of debt and payments to manage. They now have to think seriously about starting to pay back those loans they have taken out and that have helped them through their college years. Often people have taken out numerous loans and once the graduate they will start getting requests from different companies at different times for loan repayment. It could start to become a struggle keeping on top of their financial situation. Consolidating their loans into one affordable loan payable over an extended period of time may be the answer for them.
It is wise to start thinking about consolidating federal and private student loans a few months before graduation. A lot of the time there is some sort of consolation period before you have to start paying back your loan. Often for federal loans this is a period of about 60 days. If you are thinking about consolidating non federal student loans then the grace period might be a bit longer; up to 6 months. Whichever one it is, there are lots of companies out there that can help you with consolidating federal and private student loans.
An advantage of consolidating non federal student loans is that it can significantly lower the amount you have to pay each month by combining all the private loans into one loan that is much more manageable. Depending on which company you choose will depend on the type of loan repayment plan you get but it is possible to considerably reduce your monthly payments. Consolidating non federal student loans can really help simplify your payment process.
You can look at consolidating federal and private student loans but it is generally a good idea to keep them separate to keep interest rates lower. Companies generally just concentrate on either consolidating non federal student loans or consolidating federal student loans, so consolidating non federal student loans will involve looking at different companies to those that offer federal loan consolation. The process is usually simple and straight forward and you will find companies that offer benefits like no application fees and no prepayment penalties. Any graduate who is looking at consolidating non federal student loans can apply as long as they have finished school. They are likely to find that consolidating non federal student loans will provide a long term, lower payment solution for their loan repayment situations.
Consolidating federal and private student loans is certainly a wise idea to ensure a safer and more secure financial future. It is easy to find a company that will suit your needs.
by Ed Mitchell
Most people find that towards the end of their time at college they have what seems like an overwhelming amount of debt and payments to manage. They now have to think seriously about starting to pay back those loans they have taken out and that have helped them through their college years. Often people have taken out numerous loans and once the graduate they will start getting requests from different companies at different times for loan repayment. It could start to become a struggle keeping on top of their financial situation. Consolidating their loans into one affordable loan payable over an extended period of time may be the answer for them.
It is wise to start thinking about consolidating federal and private student loans a few months before graduation. A lot of the time there is some sort of consolation period before you have to start paying back your loan. Often for federal loans this is a period of about 60 days. If you are thinking about consolidating non federal student loans then the grace period might be a bit longer; up to 6 months. Whichever one it is, there are lots of companies out there that can help you with consolidating federal and private student loans.
An advantage of consolidating non federal student loans is that it can significantly lower the amount you have to pay each month by combining all the private loans into one loan that is much more manageable. Depending on which company you choose will depend on the type of loan repayment plan you get but it is possible to considerably reduce your monthly payments. Consolidating non federal student loans can really help simplify your payment process.
You can look at consolidating federal and private student loans but it is generally a good idea to keep them separate to keep interest rates lower. Companies generally just concentrate on either consolidating non federal student loans or consolidating federal student loans, so consolidating non federal student loans will involve looking at different companies to those that offer federal loan consolation. The process is usually simple and straight forward and you will find companies that offer benefits like no application fees and no prepayment penalties. Any graduate who is looking at consolidating non federal student loans can apply as long as they have finished school. They are likely to find that consolidating non federal student loans will provide a long term, lower payment solution for their loan repayment situations.
Consolidating federal and private student loans is certainly a wise idea to ensure a safer and more secure financial future. It is easy to find a company that will suit your needs.
วันอังคารที่ 8 มกราคม พ.ศ. 2551
Private Student Loans - What You Need To Know
Private Student Loans - What You Need To Know
by Ken MacKenzie
Private student loans should be the last stop in trying to get the money to cover your college bills because they will cost you far more in the end than most other forms of financing.
Unfortunately for college students, financial aid packages from many schools do not cover the entire cost of education. Based on your FAFSA (Free Application for Federal Student Aid), schools will determine if you are eligible for Federal grants and loans (Stafford Loans, Perkins Loans, Pell Grants, Federal Work Study, etc.) and these will be added to your package first.
Eligibility for grants and scholarships from some states and colleges will also be determined by the FAFSA. You have the choice to accept or reject any of the grants and loans in your package, though acceptance is usually called for, since the interest rates on these government loans is usually much cheaper than any private student loans you will find.
Once you have added up all the scholarships, grants and loans, you may find that you still need an additional sum to get through the year. At this point a private student loan may be your only realistic option. Also known as alternative student loans, they are available from many private companies.
One major difference between the private and the government loans are that the private loans depend on your credit rating. The better your rating, the lower the interest rate you can expect to receive. The better your rating, the lower the loan fee you can expect to pay to get the loan. If you have a poor credit score or none at all, then you may still be able to secure a good rate by having a credit worthy cosigner.
You will need to be certain of the terms of your loan, since there are many different terms available depending on the lender. Repayment may start immediately, or be deferred until graduation. Even if deferment is allowed, interest begins accumulating immediately, so the balance will be increasing until you graduate and start making payments. Some lenders will allow you to pay interest only while you are still in school, which will help to keep the payments down later. Some lenders will give you discounts if you set up automatic payments or if you make a certain number of on time payments.
If you do have a cosigner, they need to be aware of the possible consequences of their involvement. If you are unable to make your payments, they may be required to make the payments themselves, since they have taken on the responsibility by cosigning. It could also affect their ability to get a loan while the private student loan is still active. The reason is that their debt to income ratio will be higher, since your loan shows also on their credit report.
In conclusion, if there are other alternatives available, private student loans are not the way to go. If not, then a good credit rating or a cosigner will at least help you to get the best possible rates and terms. Contact several lenders and compare the interest rates, as well as the other payment conditions
by Ken MacKenzie
Private student loans should be the last stop in trying to get the money to cover your college bills because they will cost you far more in the end than most other forms of financing.
Unfortunately for college students, financial aid packages from many schools do not cover the entire cost of education. Based on your FAFSA (Free Application for Federal Student Aid), schools will determine if you are eligible for Federal grants and loans (Stafford Loans, Perkins Loans, Pell Grants, Federal Work Study, etc.) and these will be added to your package first.
Eligibility for grants and scholarships from some states and colleges will also be determined by the FAFSA. You have the choice to accept or reject any of the grants and loans in your package, though acceptance is usually called for, since the interest rates on these government loans is usually much cheaper than any private student loans you will find.
Once you have added up all the scholarships, grants and loans, you may find that you still need an additional sum to get through the year. At this point a private student loan may be your only realistic option. Also known as alternative student loans, they are available from many private companies.
One major difference between the private and the government loans are that the private loans depend on your credit rating. The better your rating, the lower the interest rate you can expect to receive. The better your rating, the lower the loan fee you can expect to pay to get the loan. If you have a poor credit score or none at all, then you may still be able to secure a good rate by having a credit worthy cosigner.
You will need to be certain of the terms of your loan, since there are many different terms available depending on the lender. Repayment may start immediately, or be deferred until graduation. Even if deferment is allowed, interest begins accumulating immediately, so the balance will be increasing until you graduate and start making payments. Some lenders will allow you to pay interest only while you are still in school, which will help to keep the payments down later. Some lenders will give you discounts if you set up automatic payments or if you make a certain number of on time payments.
If you do have a cosigner, they need to be aware of the possible consequences of their involvement. If you are unable to make your payments, they may be required to make the payments themselves, since they have taken on the responsibility by cosigning. It could also affect their ability to get a loan while the private student loan is still active. The reason is that their debt to income ratio will be higher, since your loan shows also on their credit report.
In conclusion, if there are other alternatives available, private student loans are not the way to go. If not, then a good credit rating or a cosigner will at least help you to get the best possible rates and terms. Contact several lenders and compare the interest rates, as well as the other payment conditions
วันศุกร์ที่ 14 ธันวาคม พ.ศ. 2550
Preparing for the future with student loan consolidation
Preparing for the future with student loan consolidation
by Groshan Fabiola
Student loan debt from multiple lenders is a burden that many students graduate with. The good news is that student loan consolidation is available for both federal and private student loan programs. It is not a good idea, however, to consolidate student loan debt from both federal and private lenders; they should be consolidated separately.
Federal student loan consolidation has some benefits over private student loan consolidation for a few reasons. There are three main reasons for federal loan consolidation, which are to lock in an interest rate, simplify finances and lower monthly payments. After consolidating student loan accounts, borrowers only need to make a single student loan payment each month. It is much easier to remember to make payments on time without having to balance multiple payments.
Borrowers can also spread out federal student loan repayment over as much as 30 years, and the interest rate on these student loans is generally very low. Federal student loan consolidation results in a single fixed interest rate guaranteed for the life of the loan, so there's no need to worry about their rate fluctuating with the market. The interest rate on federal loan consolidation is determined by the weighted rates of the student loans that are being consolidated. The government has set a rate cap of 8.25 percent on federal student loan consolidation.
All federal student loans are eligible for consolidation, but the best interest rates are available while they are in their grace periods rather than in repayment. There is no minimum balance, employment history or cosigner needed for to qualify for federal student loan consolidation. Applying for federal loan consolidation is free, and borrowers do not have to go through credit checks.
It takes one or two months for a federal student loan consolidation to go into effect, at which time student loan repayment will begin. There are four student loan repayment options, which are standard, graduated, income-contingent and extended. Graduated repayment is where payments increase gradually, income-contingent repayment is where payments are based on annual income, and extended repayment is where payments stretch over a longer period. There is also no prepayment penalty on federal loan consolidation.
It is a bit more different to consolidate private student loan debt, but the main benefit is the same. It is much easier to make a single student loan payment each month than to pay off several different loans separately. It's also possible to obtain a fixed interest rate and improve one's credit score by having fewer accounts open. Private loan consolidation is a bit more difficult to obtain than federal loan consolidation, though. In order to be eligible, one must be a U.S. citizen, pass a credit check and often pay a small application fee.
The terms and conditions vary much more with private student loan consolidation than with federal student loan consolidation. There are several things that everyone interested in private loan consolidation should consider, though, including forfeiture of the individual benefits of the separate loan accounts. Some lenders may also extend a variable interest rate rather than a fixed one. Borrowers can also only consolidate private student loan debt once, and can never "un-consolidate" their student loans.
When students and graduates do their homework, they can make the most of their student loan debt through a consolidation loan. There are several differences between federal and private student loans, including the ways they are consolidated. Any student who is nearing graduation or who has recently graduated should definitely look into their student loan consolidation options; it may be the best way to ensure a solid financial future.
by Groshan Fabiola
Student loan debt from multiple lenders is a burden that many students graduate with. The good news is that student loan consolidation is available for both federal and private student loan programs. It is not a good idea, however, to consolidate student loan debt from both federal and private lenders; they should be consolidated separately.
Federal student loan consolidation has some benefits over private student loan consolidation for a few reasons. There are three main reasons for federal loan consolidation, which are to lock in an interest rate, simplify finances and lower monthly payments. After consolidating student loan accounts, borrowers only need to make a single student loan payment each month. It is much easier to remember to make payments on time without having to balance multiple payments.
Borrowers can also spread out federal student loan repayment over as much as 30 years, and the interest rate on these student loans is generally very low. Federal student loan consolidation results in a single fixed interest rate guaranteed for the life of the loan, so there's no need to worry about their rate fluctuating with the market. The interest rate on federal loan consolidation is determined by the weighted rates of the student loans that are being consolidated. The government has set a rate cap of 8.25 percent on federal student loan consolidation.
All federal student loans are eligible for consolidation, but the best interest rates are available while they are in their grace periods rather than in repayment. There is no minimum balance, employment history or cosigner needed for to qualify for federal student loan consolidation. Applying for federal loan consolidation is free, and borrowers do not have to go through credit checks.
It takes one or two months for a federal student loan consolidation to go into effect, at which time student loan repayment will begin. There are four student loan repayment options, which are standard, graduated, income-contingent and extended. Graduated repayment is where payments increase gradually, income-contingent repayment is where payments are based on annual income, and extended repayment is where payments stretch over a longer period. There is also no prepayment penalty on federal loan consolidation.
It is a bit more different to consolidate private student loan debt, but the main benefit is the same. It is much easier to make a single student loan payment each month than to pay off several different loans separately. It's also possible to obtain a fixed interest rate and improve one's credit score by having fewer accounts open. Private loan consolidation is a bit more difficult to obtain than federal loan consolidation, though. In order to be eligible, one must be a U.S. citizen, pass a credit check and often pay a small application fee.
The terms and conditions vary much more with private student loan consolidation than with federal student loan consolidation. There are several things that everyone interested in private loan consolidation should consider, though, including forfeiture of the individual benefits of the separate loan accounts. Some lenders may also extend a variable interest rate rather than a fixed one. Borrowers can also only consolidate private student loan debt once, and can never "un-consolidate" their student loans.
When students and graduates do their homework, they can make the most of their student loan debt through a consolidation loan. There are several differences between federal and private student loans, including the ways they are consolidated. Any student who is nearing graduation or who has recently graduated should definitely look into their student loan consolidation options; it may be the best way to ensure a solid financial future.
วันพฤหัสบดีที่ 13 ธันวาคม พ.ศ. 2550
Exploring Basics Of The Federal Student Loans
Exploring Basics Of The Federal Student Loans
by Ken Golden
A student who wants to loan money for her studies have two main sources to consider: the government or federal loan, or the private loan.
A federal subsidized student loan means the federal government makes the interest payments to the financial institution for the period that the student is in college or at university, as well as during the grace period granted to the student.
There are many federal direct student loan programs available from different institutions. It is wise to solicit advice from your parents and other sources before you decide what type of federal direct student loan would suit you best.
A federal loan is often not sufficient to cover all your expenses. Therefore you would probably also need a private student loan to supplement a federal loan. This money can be applied to any of your educational needs.
Federal loans can be challenging. If you acquire several federal loans with varying repayment periods and payment amounts, it will be a challenge to manage your cash flow to service these loans at the appropriate repayment dates.
With federal loans, you will need to start making your loan repayments six months after your graduation or after you've left school. It is important to plan and budget for this because it can make a hefty dent in your monthly budget.
When filling out an application for a federal student loan, there are some tips to make the process a little easier.
The first form you will need to fill out is the Free Application for Federal Student Aid (FAFSA) form.
You need to be organized and gather all the information that you are going to need to fill out the forms.
It is important to get started early when filling out your federal government student loan application. Do not wait until the last minute because you do not want your application to disappear in the usual last minute avalanche.
When filling out the forms, allocate sufficient time for the activity. It can easily take up to an hour to complete the application.
When you include the student loan money in your budget, remember that with federal student loans there are fees that are deducted from the loan amount, which means you will not receive the full loan amount.
by Ken Golden
A student who wants to loan money for her studies have two main sources to consider: the government or federal loan, or the private loan.
A federal subsidized student loan means the federal government makes the interest payments to the financial institution for the period that the student is in college or at university, as well as during the grace period granted to the student.
There are many federal direct student loan programs available from different institutions. It is wise to solicit advice from your parents and other sources before you decide what type of federal direct student loan would suit you best.
A federal loan is often not sufficient to cover all your expenses. Therefore you would probably also need a private student loan to supplement a federal loan. This money can be applied to any of your educational needs.
Federal loans can be challenging. If you acquire several federal loans with varying repayment periods and payment amounts, it will be a challenge to manage your cash flow to service these loans at the appropriate repayment dates.
With federal loans, you will need to start making your loan repayments six months after your graduation or after you've left school. It is important to plan and budget for this because it can make a hefty dent in your monthly budget.
When filling out an application for a federal student loan, there are some tips to make the process a little easier.
The first form you will need to fill out is the Free Application for Federal Student Aid (FAFSA) form.
You need to be organized and gather all the information that you are going to need to fill out the forms.
It is important to get started early when filling out your federal government student loan application. Do not wait until the last minute because you do not want your application to disappear in the usual last minute avalanche.
When filling out the forms, allocate sufficient time for the activity. It can easily take up to an hour to complete the application.
When you include the student loan money in your budget, remember that with federal student loans there are fees that are deducted from the loan amount, which means you will not receive the full loan amount.
An overview of Federal Student Loans
Are you beginning the process of figuring out how you're going to pay for college? Financial aid is great - it'll help you achieve your education dreams, but it's a complex process with a growing variety of student loan options from which to choose. Assuming you've explored all opportunities for scholarships and grants, your next option is to research student loans. These come in two general categories: federal student loans and private student loans.
The first place any prospective student should start is with federal student loans. Federal student loans are backed by the U.S. government and are available directly through your school or through banks and student loan lenders via the Federal Family Education Loan Program (FFELP). These loans typically have lower interest rates, multiple repayment options, longer repayment periods, and much easier credit requirements than private loans. In order to receive a federal student loan, you must complete and submit the FAFSA, the Free Application for Federal Student Aid. For assistance with this form, visit FAFSAonline.com.
Federal student loans come in a variety of forms, from need-based aid to loans targeted to parents:
Perkins Loan
The Perkins Loan offers a very low fixed rate of 5% to undergraduate and graduate students who demonstrate financial need. Depending on your level of need, undergraduates can borrow up to $4,000 and graduate students up to $6,000. Unlike other federal loans, the funds are dispersed from the school and the student does not have to be enrolled at least half-time to be eligible.
Stafford Loan
The Stafford Loan is the most common federal student loan as it is not necessary to demonstrate financial need - anyone can apply. These loans carry a fixed interest rate and come in two forms: subsidized and unsubsidized. The interest on subsidized Stafford Loans is paid by the government while the student is in school; the student pays the interest on unsubsidized Stafford Loans but they can defer making any payments until graduation. All Stafford Loans require the student to be enrolled at least half-time. Depending on year, students can borrow between $2,625 (freshmen) and $5,500 (senior) a year.
PLUS Loan
The Parent Loan for Undergraduate Students (PLUS) is targeted to parents of dependent undergraduate students who are enrolled at least half-time. Although there is not a full-scale credit check for these loans, the applicant must not have any adverse credit experiences on their record (e.g., bankruptcy, default). Parents can borrow up to the student's cost of attendance less any other aid the student has received. These loans carry a fixed interest rate that is higher than the rate for Stafford Loans, and repayment starts while the student is in school.
Private (or Alternative) Loans
As mentioned above, you should exhaust your options for federal loans before turning to private student loans. But federal loans often do not fully cover the cost of tuition. The market for private loans has been growing dramatically in recent years to help fill the gap between rapidly rising tuition costs and funding from federal student loans. There are a few pros and cons to consider when looking for private loans.
Pros:
* Students can borrow up to 100% of the cost of education
* Many offer borrower benefits that can reduce the interest rate
* Lower rates may be available if your school certifies enrollment and the check is sent directly to the school
* Funds may be used for tuition, room and board, books, or a computer
* You are not required to complete the FAFSA
Cons:
* These loans are subject to a credit check, which will determine approval as well as your interest rate (using a co-signer significantly increases your chances of approval)
* The interest rate is variable and may increase over the life of the loan
* Private student loans may not include a deferment option
The first place any prospective student should start is with federal student loans. Federal student loans are backed by the U.S. government and are available directly through your school or through banks and student loan lenders via the Federal Family Education Loan Program (FFELP). These loans typically have lower interest rates, multiple repayment options, longer repayment periods, and much easier credit requirements than private loans. In order to receive a federal student loan, you must complete and submit the FAFSA, the Free Application for Federal Student Aid. For assistance with this form, visit FAFSAonline.com.
Federal student loans come in a variety of forms, from need-based aid to loans targeted to parents:
Perkins Loan
The Perkins Loan offers a very low fixed rate of 5% to undergraduate and graduate students who demonstrate financial need. Depending on your level of need, undergraduates can borrow up to $4,000 and graduate students up to $6,000. Unlike other federal loans, the funds are dispersed from the school and the student does not have to be enrolled at least half-time to be eligible.
Stafford Loan
The Stafford Loan is the most common federal student loan as it is not necessary to demonstrate financial need - anyone can apply. These loans carry a fixed interest rate and come in two forms: subsidized and unsubsidized. The interest on subsidized Stafford Loans is paid by the government while the student is in school; the student pays the interest on unsubsidized Stafford Loans but they can defer making any payments until graduation. All Stafford Loans require the student to be enrolled at least half-time. Depending on year, students can borrow between $2,625 (freshmen) and $5,500 (senior) a year.
PLUS Loan
The Parent Loan for Undergraduate Students (PLUS) is targeted to parents of dependent undergraduate students who are enrolled at least half-time. Although there is not a full-scale credit check for these loans, the applicant must not have any adverse credit experiences on their record (e.g., bankruptcy, default). Parents can borrow up to the student's cost of attendance less any other aid the student has received. These loans carry a fixed interest rate that is higher than the rate for Stafford Loans, and repayment starts while the student is in school.
Private (or Alternative) Loans
As mentioned above, you should exhaust your options for federal loans before turning to private student loans. But federal loans often do not fully cover the cost of tuition. The market for private loans has been growing dramatically in recent years to help fill the gap between rapidly rising tuition costs and funding from federal student loans. There are a few pros and cons to consider when looking for private loans.
Pros:
* Students can borrow up to 100% of the cost of education
* Many offer borrower benefits that can reduce the interest rate
* Lower rates may be available if your school certifies enrollment and the check is sent directly to the school
* Funds may be used for tuition, room and board, books, or a computer
* You are not required to complete the FAFSA
Cons:
* These loans are subject to a credit check, which will determine approval as well as your interest rate (using a co-signer significantly increases your chances of approval)
* The interest rate is variable and may increase over the life of the loan
* Private student loans may not include a deferment option
The Many Great Benefits to be Found in Federal Student Loans
The Many Great Benefits to be Found in Federal Student Loans
by Muna wa Wanjiru
While our lives can be considered as being very hectic we look back on our college days with happy nostalgia. It is perhaps for this reason that parents try to get their children into universities where they can build a future as well find a host of treasured memories. While this dream is very admirable there are times when money can pose a problem for this educational dream. The number of federal student loans that are around can help you out if this problem.
When you look for a suitable financial aid program do keep your options open. The many programs that you can find will offer you many benefits that will not only help your child but also yourself. You should however make sure to collect at least several different ones. The documentation that is listed should be read.
If you encounter any sections or items that you don't understand you should see about getting clarification for these questions. Some of the federal student loans will be able to be paid back after you have finished your child has finished with their higher education. In these many loans you will have lots of terms and conditions that you will need to understand.
A few of the higher educational institutes will also have loan programs of their own. This situation makes it easier for you to choose from the many programs which are available. Just to give you an idea of the federal student loans you will be able to apply to here are a few ones that are well known. The Stafford student loan is one of the more popular programs.
This low cost program has many benefits for the student. These benefits will include subsidized and unsubsidized loan programs. The amount of money that you will need to pay with these programs is different. For this reason you should decide which route you wish to take with these federal student loans.
FAFSA is the other well known student loan program. As these two programs are popular it is best if you research the various characteristics of these federal student loans and then see if the other programs can provide you with the same benefits.
There are times when the various federal student loans that we see are not viable options for our children's education. At these times looking for alternative loan routes is a good option for you to take.
Even though the federal student loans are not an option that you can take you can help someone out. Let them know about them know about the many great benefits to be found in federal student loans. After all this is for the benefit of tomorrows generation of citizens.
by Muna wa Wanjiru
While our lives can be considered as being very hectic we look back on our college days with happy nostalgia. It is perhaps for this reason that parents try to get their children into universities where they can build a future as well find a host of treasured memories. While this dream is very admirable there are times when money can pose a problem for this educational dream. The number of federal student loans that are around can help you out if this problem.
When you look for a suitable financial aid program do keep your options open. The many programs that you can find will offer you many benefits that will not only help your child but also yourself. You should however make sure to collect at least several different ones. The documentation that is listed should be read.
If you encounter any sections or items that you don't understand you should see about getting clarification for these questions. Some of the federal student loans will be able to be paid back after you have finished your child has finished with their higher education. In these many loans you will have lots of terms and conditions that you will need to understand.
A few of the higher educational institutes will also have loan programs of their own. This situation makes it easier for you to choose from the many programs which are available. Just to give you an idea of the federal student loans you will be able to apply to here are a few ones that are well known. The Stafford student loan is one of the more popular programs.
This low cost program has many benefits for the student. These benefits will include subsidized and unsubsidized loan programs. The amount of money that you will need to pay with these programs is different. For this reason you should decide which route you wish to take with these federal student loans.
FAFSA is the other well known student loan program. As these two programs are popular it is best if you research the various characteristics of these federal student loans and then see if the other programs can provide you with the same benefits.
There are times when the various federal student loans that we see are not viable options for our children's education. At these times looking for alternative loan routes is a good option for you to take.
Even though the federal student loans are not an option that you can take you can help someone out. Let them know about them know about the many great benefits to be found in federal student loans. After all this is for the benefit of tomorrows generation of citizens.
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