Many high school grads only worry about getting into their dream school. They write their college application essays and check the mail everyday waiting for that letter to come to tell them if they have been accepted by the university of their choice. Often that dream school can be very expensive and many people will find they cannot afford to pay all the expenses on their own. Even their second or third choice school can be pricey. This is where federal student loans may be able to help.
Federal student loans can allow those who would not normally have the money to pay for school, pay for it by receiving a loan. Federal student aid has some eligibility requirements. Some of the requirements for federal student aid are: you must be a U.S. citizen or eligible non-citizen; you must be attending a participating school, be registered with selective service, and working toward a degree. There are other requirements as well.
Federal student loans are financial help for those who are enrolled in an eligible school program that participates in federal student aid plans. School can generally be a four-year or a two-year institution. Aid is generally based on financial need and not on grades of GPA. With federal student loans, you are borrowing money for college tuition, room and board and other college expenses and you must pay back this money after completing school. This money is paid back with interest.
One of the most well known federal plans is the Free Application for Federal Student Aid (FAFSA). You complete this form and submit it to find out what type of aid you would be eligible to receive. Your family may be in an income bracket that means you will not be able to receive financial aid. However, you should always submit and application.
Here are some common types of student loans. All four of these loans must be repaid.
The Federal Perkins loan – The federal Perkins loan consists of five percent loans for both undergraduate and graduate students in which payment is made to the school that made the loan.
The Subsidized FFEL – The subsidized FFEL is a loan in which the United States Department of Education pays the interest on the loan while the person is in school.
The Unsubsidized FFEL – The unsubsidized FFEL is like the previous loan except the person who is the borrower is responsible for the interest for the life of the loan.
The Federal PLUS Loan – The federal PLUS loan is made available to the parents of an undergraduate who is a dependent of theirs.
While interest rates do increase the costs of student loans, it is important to remember the importance of a college education. It will be worth the extra money to be able to finance your university degree. A college diploma will be able to help get you a better job; one that is better-paying, more fulfilling and advanced. Student loans are just a stepping stone to help you obtain your degree and have a promising future.
By Lauren Culliton