Government Student Loans
Student loans are one excellent way to pay for college. However, you already know that, don’t you? The emphasis now is finding the right kind of loan for you. You know you need a student loan to pay for college because you’ve exhausted all other forms of aid, but you’re not sure where to start. Does that sound about right? If so, keep reading as we discuss the best student loan options out there today.
If you have to get a student loan, always try to get one from the federal government first. Government student loans have the lowest interest rates, the most lenient repayment plans and the most flexible terms. There’s just no getting around it. No matter how you look at it, federal student loans make life easier for financially struggling college students. I mean, if you think about it, it really makes sense. College students often have little to no credit, so borrowing from a bank either isn’t an option or causes a very high interest rate.
There are quite a few types of government student loans available to college students actively pursuing degrees. Here are a few of the most common:
The Federal Stafford Loan is one of the most commonly distributed loans to college students. It is for students that show some need for financial assistance, but does not have the same low-income ceilings as federal grants. Likewise, many students can get this loan subsidized, meaning the federal government will pay any interest that accrues on the loan while you are in school, so you won’t have to worry about it.
The Federal PLUS Loan is meant for the parents of college students. Parents can borrow as much as they need to help fund their child’s college education. However, these loans are not subsidized and the parent will be responsible for making payments while the student is still in school.
The Federal Perkins Loan is a loan for students that show exceptional need for financial assistance. It is a beneficial program that offers a super lower interest rate of only 5%. Rather than being awarded money directly from the government or through a participating bank, the Perkins Loan is distributed through your school of choice. Therefore, it will be your campus that decides which students show the most need and which qualify.
Now, you don’t have to pick and choose which federal loans you’d like to apply for. Rather, when you fill out and submit the FAFSA, you apply to all at once. With all of your financial information in one convenient place, your application will be processed and your worthiness will be evaluated.
If it is shown that you do qualify for one or more of these government student loans, you will be notified by means of an award letter. Should you choose to accept one of these loans in the amount offered, be sure to return the award letter and to sign a Master Promissory Note (MPN) to indicate you agree to the terms of the loan and agree to begin repayment at the designated date?
In some cases, you are able to choose the lender of your federal student loan, so be sure to choose wisely. Sallie Mae student loans and other low interest student loan companies are good choices. Just be sure to thoroughly read the fine print of your loan application before signing a thing. This commitment will stick with you for several years, so you want to make sure it is right.
