Four Different Types Of Fed Student Loan
In the United States, college students who find difficulties in continuing or even entering college may find a great financial assistance through a fed student loan, or also known as the Federal education loan. Continue reading this post to learn more about this student loan in order to know what your options are, if you are planning on entering college with limited funds.
What Is A Federal Educational Loan?
This type of student loan is used, in order to cover the majority of one’s college expenses that are not limited to college tuition fee, rent for the dormitory, college textbooks, and even allowance to use for the student’s day-to-day living. Many college students are looking to apply for a federal student loan in order to pursue their dreams of finishing college, and find a career that will give him a better future. This type of college student loan is ideal, as compared to private loans, as it has low interest rates, and a loan specially designed for individuals who want to finish college.
A Federal Educational Loan is an inexpensive way to finish college. It has flexible repayments in the future, which will not burden you at the time when you need to pay off your balance.
Before thinking of applying for a fed student loan, you must first understand the different types of federal student loans that are available for every aspiring college student. To learn more of the different types of this college loan, please continue reading the rest of the paragraphs below.
Four Types Of Federal Educational Loans
Federal Perkins Loan
This type of educational loan is normally given or provided by the school to those who show real need for financial assistance. The school uses the funds that are provided by the federal government. However, the funds may be limited, so it is not that easy to avail this kind of loan. The Federal Perkins loan has low interest rate as well, and it is offered to students who are undergraduate or graduate students who wish to pursue higher studies.
Each aspiring student will have to apply in the FAFSA or also known as the Federal Student Aid, to know if he or she is eligible. Application is for free, so no need to worry about extra expenses. If FAFSA finds your application eligible, you will be noted via letter, which will be forwarded to your school’s administration.
Direct Stafford Loans
Among the four different types of fed student loan, the Stafford is the most common of all. It is ideal for any type of student whether graduate, professional, and undergraduate. Low interest rates are also given to this loan and flexible repayment scheme will be offered in the future. Students who wish to apply for a Stafford loan can choose between a subsidized (some of the interest is paid by the government) and unsubsidized (you pay for all the interest your loan accrues) type of loan. To know more about the two types of Stafford loan, check the FAFSA.
Direct Plus Loans
This type of fed student loan is normally awarded to students who have graduated already and professional, who wishes to pursue further studies. This loan has a fixed rate, but it will also have a flexible repayment scheme in the future. You will be notified via an award letter from your school, given by the federal government, when your application proves eligibility.
Direct Plus Loans For Parents
As the name implies, this fed student loan is a kind of educational loan that parents with undergraduate children can apply. The money from the loan can be used to pay for your child’s tuition fee. The Direct Plus Loans For Parents will have a fixed monthly interest rate, and flexible repayment scheme. Your child’s school will inform you if your child is eligible for the loan, after they receive an award letter from the federal government.
These are the different types of Federal Educational Loan each aspiring college student can apply for. Eligibility will vary depending on the loans, but most often than not, the most factor that will be looked at is the real need for financial assistance, and if the student is really credible to receive the loan.
A fed student loan is really a big help, especially to those who wishes to pursue college studies or further studies, but with limited funds on hand. It has low interest rates and easy repayment schemes, so students who have availed this loan will not have a hard time paying for it in the future. Furthermore, these loans can be forgiven too. However, the process will be tedious, and you have to provide proofs and eligibilities for your federal educational loan or college education loan to be forgiven by the federal government.