Federal Student Loans

            There are many benefits to researching student loans. There are many different ones to choose from and to compare. The federal government is one of the entities that offer quality student loans that will not leave you in debt after graduation. Even when trying to pick just one student loan that are many things to consider as things to consider. How does any one person choose the right one for their education?

• FASFA

A good place for any person to start with is by filling out FAFSA paperwork. This paperwork will start the process of applying for grants and scholarships to help you fund your education. A student can also start looking into lining up work-study assignments and/or a part-time job on and off the school campus. These are good things to begin, but taking out a loan can also be a step to funding the rest of your education. When looking at Federal Student loans you need to get all the facts and make note of the following:

• Interest rates are generally lower and are always fixed.
  • Credit checks or cosigners are generally unnecessary.
  • They have flexible payment plans.
  • There is loan forgiveness which can utilize in certain cases.
  • Consolidating your federal student loans can lower your monthly payments.

There are three things to remember when considering applying for a Federal Student Loan:

• The amount you can borrow depends on the grade level and the amount you will be paying for the school.
  • You do not get to choose the loan servicer. They are chosen by the school or by the federal government.
  • Interest that has been paid on can be tax-deductible.

More Useful Tips on Federal Student Loans

Federal Student loans are a good way to get the money one needs to go to school. There are specific requirements for each loan that needs to be looked at and often you can qualify for more than one. Qualifying for them is not that hard and there are numerous benefits to choosing the federal government as your loan curator. These benefits are:

• A Federal Student loan is generally more flexible with their payment plans.
  • A Federal Student loan has more options for repayment if it needs to be changed.
  • The loans have fixed interest rates so you will not need to worry about them being changed later.
  • Certain public service employees are eligible for loan forgiveness
    • Government Employees
    • Public School teachers
    • Certain Non-profit Employees.

More can be learned about loan forgiveness when you visit the Department of Education’s Website.

            Loans can also be discharged if the student dies. This included student debt. This does not include all loans though. The PLUS loans are attached to any parent or guardian whose name is on the loan. The loan can be forgiven if the child dies, but this is not always the case. The terms of the loan will be specified before it is signed and because the parent’s name is on the loan, they can still be responsible for it if the child predeceases them. No parent wants to consider this scenario, but the terms of the loan will include a clause if such an event happens.

            When looking at government programs for student loans the rules change over time. If you have already signed the loan you will know the terms of your loan. You need to be aware of the current changes to the laws and regulations around student loans. You also need to keep an eye on the interest rates and how they change over time. The economy and its shifting play a part in how loans are adjusted. If you are looking into loan consolidation there are more benefits and detriments to being looked into. Consolidating does give some additional benefits depending on the type of loan you have.

• Subsidized Student Loans

            Subsidized Federal Loans are an option to look into. With subsidized debt, the Department of Education will cover some of the interest on the loan while you are enrolled in school.  This is only applicable if you are enrolled at least part-time. You will need to submit proof to the holders of your loan to show that you are enrolled at least part-time and you will need to show demonstrate that you have a financial need to have your loan subsidized.

• Unsubsidized Student Loans

Unsubsidized loans are accessible for graduate and professional students. The loans are also not awarded based on need or merit. These loans are granted to almost anyone who applies for them as long as they are enrolled at least part-time. You will still be expected to pay on the interest you are accruing while you are enrolled. You will still be responsible during your grace period or if you need to apply for a deferment or forbearance. This means you will be adding to your remaining debt.

• Consolidated Loans

Consolidating federal loans of any type can allow for students and former students to pool their loans into one single loan with a single party servicing the loan. This means one monthly payment. The rates can be negotiated and the payments will be more likely to be lower than if you kept all the loans separate. It can be also extended out to a repayment plan of 20 years. Consolidation is not right for all people or for all loans. It is helpful to allow for income-driven repayment but can take away from other possible repayment options or Public Service Loan Forgiveness.

• Refinancing Student Loans

Refinancing student loans is available mostly for private lender loans though it is possible through the consolidation process to do this with a Federal Loan. You will need to work directly with the person consolidating your loans to negotiate any changes beyond consolidating your loan. This is not always possible and they are generally reluctant to do this.

Choosing a Federal Loan over a private loan has many benefits that might not be apparent until after you graduate.