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What kinds of federal student loans do you know?

Everybody has heard about federal student loans at least once in their lives. But how do they actually work? What are the kinds of government student loans?

Going to college in 2018 is not an easy task. Tuition fees are so high that many of my friends have decided to take a few years off to save more money. What is happening with the system for people to abandon their dreams without a second of a doubt?

Anyway, I’ve decided to look for an education loan, either a private or federal one. I think that loans for students are the best chance to get higher education nowadays.

If there are any tips you can give, I’ll gladly accept them.

Dana Keller

in Student Loans

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Jodi Brooks on March 8, 2018

This is a really great question. Facing the issue of government student loans myself, I was confused with the variety of options to choose from. There are a few variants of the U.S. federal loans.

Generally, they can be divided into two categories: the Federal Perkins Loan Program and the William D. Ford Federal Direct Loan Program.

The first one is directed at undergraduate and graduate students with exceptional financial needs. In this case, school lends you the money.

The second option is the most widespread choice for most American students. In its turn, it can be divided into a few more types. Direct subsidized loans are for eligible undergraduate students with financial need. They help you cover the cost of higher education. You don’t have to pay the money back during your studies and about half a year after you graduate.

The second option are direct unsubsidized loans that aren’t based on financial needs. However, these education loans have to be repaid even when you are studying. The amount of money depends on the cost of attendance and whether you are receiving other financial aids.

Then, we have direct PLUS loans that slightly differ from the previous two categories. They are meant for parents and graduate students to help cover education expenses after the previous financial aid is spent. Interest is charged during all periods and will be capitalized.

There are also direct consolidation loans that not many people know about. They combine all federal loans for students into a single loan.

So, this is the basics of loans’ types. However, there is still more to learn about them. I know that the main question most people ask is how much money can you get? Let’s talk about the most popular choice—direct loans. Here, you can get from $5500 to $12500 per year if you are an undergraduate student. Graduate students can get up to $20500 each year. Other expenses that may come up are usually covered by the direct PLUS loan.

Student loans issued by the government have many benefits. For example, the interest rates are lower than those of credits and private loans. Most of them offer flexible repayment schedules. Besides, in case of subsidized loans, you don’t have to worry about them until you finish college. Also, there are very interesting extras to the plans. For example, if you choose a certain job afterward, a part of your debt will be forgiven.

There are many options to choose from.

Jordan Sotoa year ago

Though federal student loans have many benefits, you have to be smart about them. Be careful and consider all your choices.

You have to understand that a loan is a great responsibility. You’ll be repaying it for quite some time. You have to understand all tiny details about the terms of the agreement. Before you apply for a student loan, study the issue and determine how much you have to borrow. Don’t take more than you need.

When you are 100% sure that you need it, complete and submit the application—FAFSA. Here is a link for you https://studentaid.ed.gov/sa/fafsa

Then, you’ll have to complete entrance counseling that is meant to highlight your obligation to repay the money. After that comes a Master Promissory Note that enables the agreement and includes all terms of it. The whole process is easy and won’t take a lot of efforts. Loans are common things right now and the number of students getting them is impressive.


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