- Most borrowers who wish to attend college can qualify for a student loan through the federal government. These loans are not based on credit or income, but instead are based on need. To determine your financial situation, you must complete a document known as the Free Application for Federal Student Aid, or FAFSA. This document provides financial information to the government so it can make a determination of how badly you need financial aid.
- When you need a student loan, the federal government offers several options. The Stafford and Perkins student loans are the most prominent student loans available. With the Stafford loan, most can qualify and it is broken down into subsidized and unsubsidized loans. If you have a financial need, you can get a subsidized loan with a lower interest rate. With this type of loan, the federal government pays the interest for you while you are in school. Perkins loans are also available for those with financial needs and they have low interest rates.
- When you get a student loan, you do not have to pay for it while you are in college. If you have a subsidized loan, the interest can be paid for by the government while you are in school. If you have an unsubsidized loan, you can choose to defer the interest payments until you get out of school. You must start making payments six months after you stop going to school. At that point, you can choose from one of several repayment plans including a standard plan, an extended plan or a graduated plan.
- If you get a student loan and you cannot afford to make your payments on it, the lenders are typically flexible. For example, you can apply for a forbearance or a deferment of your payment. With a deferment, your payments stop for a certain amount of time and the interest may also stop accruing. With a forbearance, you do not have to make your payments, but the interest continues to accrue. With these options, you can get your payments stopped while you are having financial difficulties.
- Advertisement -
- Advertisement -