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How can I get a department of education student loan?

I am in need of financial support to start my college degree. My friends think that the best option is a department of education student loan. However, I have very little knowledge on how to get a student loan. First, can you advise me on how to apply for student loan? I would also like to get some information on the federal student loan interest rate as well. I have heard of subsidized and unsubsidized loans. What is the difference between them? How can I know if I am eligible for a loan?

Whitney Matthews

in Student Loans

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Tara Andrews on June 15, 2018

Department of education student loans are the primary choice of most people for a number of reasons, ranging from bearable interest rates and friendly repayment options. You can get a subsidized or unsubsidized loan.  If you manage to get a subsidized loan, the government covers your fees while you study. That means the debt amount will be significantly less as compared to other loans by the time you finish the college. In addition to that, federal loans are eligible for public service loan forgiveness and deferment or forbearance. But private loans do not allow forgiveness and only a few allow deferment or forbearance.

The interest rates of private loans are seriously dependent on the market conditions, but the federal student loan rates are decided by the U.S Congress. As of 2017, the interest rates of Direct Subsidized and Unsubsidized loan are 4.45%. However, the interest rates of Unsubsidized Direct Loans for graduate and professional degrees are generally higher, that is 6%. As compared to these, Direct PLUS Loans are more risky, with an interest rate of 7%. Direct Subsidized Loans allow undergraduate students to take out a maximum of $5,500 a year. The benefit of this loan is that there is no interest charged for the time you are in school. However, if you are a graduate or professional degree student, you need to go for an Unsubsidized Direct Loan that allows a maximum of $20,500 a year. Unlike the previous one, interest is added to your loan amount for the time you are in school. Direct PLUS Loans are for the parents of undergraduate students who want to finance their children’s education or for graduate and professional degree students who want to self-finance. Moreover, there is a Direct Consolidation Loan which is meant to allow you to consolidate all your federal loans into a single one with easy payment options.

Want to apply for an education loan? The first step of applying for a federal loan starts with completing the Free Application for Federal Student Aid (FAFSA). This is used by the authorities to determine what sort of aid you are eligible to receive. However, one problem associated with this system is that you will have to fill ad submit this form every year to remain eligible for the loan.

Interested? Go to the link https://www2.ed.gov/fund/grants-college.html?src=pn and create an FSA ID. Using the ID, You can fill the Free Application for Student AID. 

Wilson Hansen2 years ago

Consolidation has helped me to manage my crumbling finance. There are many benefits of using federal consolidation loans. The obvious benefit is that this will leave you with enough money to survive by reducing the monthly loan payment considerably. In addition, life looks more hassle-free as there is only a single payment to be made a month. In addition to that, you get various flexible repayment options according to your financial abilities.  The loans that are eligible for consolidation include both Subsidized and Unsubsidized Direct Loans, Grad PLUS Loans, Parent PLUS Loans, Federal Consolidation Loans, Perkins Loans, HEAL and HPSL Student Loans, and finally, Nursing School Loans. If you manage to get a federal consolidation loan, you have plenty of repayment options, ranging from standard repayment that involves a 10-year period, extended repayment if you want more time, graduated repayment that involves beginning at a small repayment that grows every two years. In addition, there is income-based repayment, income contingent repayment, and pay as you earn repayment. These three options depending on the borrowers’ discretionary income and hence more flexible. 


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