Today we will be talking about how to Apply For a Federal Student Loan and Types of Federal Student Loans. The federal government or other private sources like financial institutions, banks, or other organizations can offer loans to students.
Meanwhile, there are so many benefits attached to federal government loans which are known as federal student loans than other sources like a bank, private sectors, etc.
There are different types of federal students loans
In the U.S Department of Education, federal student loans have four types of Direct loans that are available.
Direct Subsidized Loans
These are loans that are for undergraduate students that are eligible. Who seeks financial assistance to help pay the cost of higher education a college-level or career.
Direct Unsubsidized Loans
These type of loans is for graduates, professional students, and also undergraduates, but your financial status is not a criteria to be eligible to receive this loan.
Direct PLUS loans
These are loans given to professional students or graduates and also to parents of undergraduate students who are dependent, this is to assist them to pay for their academic expenses that are not covered by other financial aid. Financial status is not a criteria to be eligible to receive this loan. However, those who have a history of loans will have to meet additional requirements to qualify for the loan.
Direct Consolidation Loans
This gives you the opportunity to join all your federal student loans into a single loan and it will be with a single loan servicer.
How much can you borrow in federal student loans?
Taking a federal student loan depends if you are an undergraduate student, professional student, or graduate, and also a parent.
- For undergraduate students, the maximum loan you can take ranges from $5,500 to $12, 500 yearly in Direct Subsidized Loans and for Direct Unsubsidized Loans. This depends on your level in school and your dependency status.
- For graduate or professional students, you can loan up to $20, 500 yearly for Direct Unsubsidized loans. To complete college costs, you can use the PLUS loans.
- While for parents of dependent undergraduate students, you can get a Direct PLUS loan to complete your ward college costs.
Why should I take government federal student loans?
You should not be afraid of taking a federal student loan, it is like an investment in your future. But when taking a loan you should be smart doing it. There are many benefits attached to federal student loans compare to other options.
- There is a fixed interest in the federal student loan and it is usually very low compare to other private loans and much lower than a credit card.
- To get most federal student loans, you are not required to have a credit check or a cosigner.
- To pay back the loan you do not have to start paying immediately until you are through with college or drop before that.
- If you are really in need of finance, the government can help pay off the interest on some loan types as you are still schooling or some period after school.
- Federal student loans give flexible payment plans and also options to shift the loan payments if you are finding it difficult to pay.
- If you work with some firm your loan may be forgiven if you meet some conditions.
How to Get a federal student loan
Before you can apply for a federal student loan. You will need to apply and by doing that. Then you will complete and submit a FAFSA (Free Application for Federal Student Aid) form. From the details provided in your FAFSA form, your school will send you a financial aid offer. This may also include a loan from the federal government. After which further steps will be provided by your school on how to accept all or part of the loan.
Before you can get your funds, you will be expected to
- Finish your entrance counseling This is a tool to make sure you comprehend the obligation of paying back the loan and
- You have to sign a Master Promissory Note, this is to agree to the terms and conditions of the loan.
If you need to apply you can contact the financial aid office in your school. And get details regarding the process for applying for federal student loans.