As you might’ve known, the college education fee is pretty expensive. In fact, two-thirds of 4-year undergraduate students have graduated with debt (2003 NPSAS report). As all of us predicted, the number is steadily increases each year. So bottom line is: almost all students need financial aid.
However, many students are complaining the tricky process of getting the financial aid. But it doesn’t have to be like that, you know? There are lots of available grants, scholarships, and loans out there, just waiting to be used.
Unlike scholarships and grants, a loan is borrowed money hat must be paid back with interest. Think carefully about how much money you need to borrow before you take out a loan…eventually, you will have to pay it all back!
Federal loans are one of the more popular options for college students because almost everyone is eligible to receive one! The U.S. department of education offers two types of federal loans:
- Stafford Loans – are for undergraduates, graduate, and professional students. The best part about Stafford Loans is that you don’t necessarily have to be in dire need of financial aid in order to qualify. In the case of Stafford Loans, the lender is typically a bank or credit union that works through the U.S. Department of Education.
- Federal Perkins Loans – are offered to students who demonstrate the greatest financial need. When you accept a Perkins Loan, the lender is your school. Therefore, the amount of aid that you receive depends on the availability of funds at your school and other scholarships that you might be getting. Undergraduates can receive as much as $20,000 in Perkins Loans, while graduate students can receive a maximum of $40,000. Another added benefit is that the government will pay your interest on the loan as long as you’re in school!
If these options sound confusing to you, don’t worry! When you accept a federal loan, you can combine several different types of federal loans into one easy-to-read payment plan. Known as Consolidation Loans, this option makes repaying your loans so much easier!
You are probably wondering what the process is for taking out a loan. If you’re applying for a federal loan, you need to check out the Free Application for Federal Student Aid (otherwise known as the FAFSA). This little form is used for all government lending programs, and oversees roughly $500 billion in student loans!
If you’re worried about skyrocketing interest rates, there is hope for student borrowers! The government has set a standard maximum interest rate for student loans, so you won’t be charged any additional fees. In fact, lenders often compete over who is offering the lowest interest rate to attract more borrowers.
Never be afraid to ask for help! There are lots of resources out there for students looking to take out educational loans. College can be affordable to EVERYONE.
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