one of the simplest ways a student can obtain financial aid for studies is by getting a loan either from the government or private organizations. The loan you collect from the government is the Federal Student Loan, it allows you as a student, actively enrolled in a school or university to obtain loans directly from the Federal government.
Private organizations such as banks or other financial institutions are also allowed to give out loans to students. There are differences between private loans and federal loans find out more here.
Federal Student Loans from Government is the best because of its relaxed rules, flexibility, and benefits.
The government of many developed countries understands the importance of education, and financing education is quite expensive. The Loans made available by the government ensures that everyone gets a chance.
Types of Federal Student Loans Available
There are 3 types of Federal student loans:
Direct Subsidized Loans
This type of loan is for undergraduate students and it is also referred to as Stafford loan. To qualify for this loan, you must be an undergraduate, and also have a genuine need for financial assistance concerning your education. All interest incurred by students under this loan is repaid by the government.
Direct Unsubsidized Loans
With this type of loan, you do not need to demonstrate any financial need, but you have to be an undergraduate or a grad student. The best part is that students are not compelled to show any credit history to qualify for this loan.
Direct Plus Loans
This loan is divided into two; Parent PLUS Loans, and Grad PLUS Loans. The Parent PLUS Loan allows parents and guidance of students who are either Grad or undergraduates to borrow money for their child’s education. And the Grad PLUS Loan allows only Grad students to borrow money without the need to show credit history.
How Much Can I Borrow In Federal Student Loans?
A Federal Student Loan gives you a lot of benefits, but it also limits the amount you are eligible to borrow each year. How much are you able to borrow each year?
|Undergraduates (subsidized)||Subsidized ($)||Overall Limit ($)|
|Third Year and Above||5,500||12,500|
Graduate and Professional students can borrow up to $40,500 yearly.
Benefit Of Federal Student Loans
- A Federal Student Loan offers you flexibility and can allow you to change the repayment option anytime.
- you don’t need to provide a co-signer to get a federal loan.
- It is not compulsory to provide a strong credit history
- Fixed and smaller interest rate.
- You can repay your depth using the income-based repayment plans.
- Documents and Requirement
- You need a social security number
- The current address of residence
- Proof of financial need.
- Must enroll in an institution or will soon be.
How to Apply For Federal Student Loan
- To apply you need to fill and complete the Free Application for Federal Student Aid (FAFSA).
- Wait and collect your financial aid award letter from your school’s financial aid office.
- Receive and accept student loans.
- Review the entire document and endorse duly.