Federal Student Loans

College is expensive, and when money is tight, or just not there, some look to take out loans to cover the balance of tuition and living expenses. This is where many get confused, and some get into trouble. There are many loans out there, but they are not all created equal. Even some that are meant for student loans can be problematic. When searching, you want to be sure you are signing up for federal student loans and that you are avoiding private lenders.

Federal student loans are backed by the government, and there are laws and regulations that are supposed to be in place to protect the student and the organization issuing the loan. Recently, new laws have been passed to keep and even tighter rein on these types of loans. If you go with something other than federal student loans, you have very little protection, and your interest rate can grow beyond anything you could have imagined. It's best to protect yourself from this. When the economy takes a turn for the worse, interest rates can skyrocket and the amount you have to repay will go up as well. It may get so far out of hand that you have no hope of paying on time.

When you want to find out about federal student loans, you can talk to your college's financial aid department. They will have all of the information you may need, and they may also already have all of the forms that you need. They can give you the applications for federal student loans, and they can even help you fill things out when you become confused. With any type of loan application, confusion is bound to come up once in a while, so be ready for it. Having help from people who know all about the forms is a great start.

When you leave college, you will have some grace periods before you have to start paying back your federal student loans. Some give six months after graduation before repayment is expected to begin, though you don't have to wait if you don't want to. You can begin to repay right away if you want to do so. There are also times when you may also be able to defer payments at times when money may be tight, but remember that even though your payments may be on hold for a little while, you will still be generating interest on the loans that you will have to pay back in the end.

Federal Student Loans Vs. Parent Loans

Federal student loans have the lowest interest rates and the best repayment options. If you need to apply for a loan and you can qualify for federal loans then make this the top choice.

As a way of limiting your loan responsibilities, only get the funds that you will need and refuse any other offers to raise it. Parents can opt to help their children pay off the loans after graduation.

Federal parent loans or PLUS loans (Parent Loan for Undergraduate Students) can be considered as another option in getting a loan that offers lower interest rates. Parents that have dependent children who are going to start their university education and have a good credit history can apply for the PLUS loan.

PLUS loans are not needs based so you can draw up a loan up to the total cost of your undergraduate education expenses with the other financial aids that you have received deducted from the actual total. One peculiar characteristic of a PLUS loan though is that the first payment for the loan starts about 60 days after the loan is granted.

This is different from a student loan where the first loan payment is deferred until after graduation. PLUS loans also require an application fee. . The big decision to be made is to determine which kind of loan will be the best option for the individual. When deciding on which loan to get you should first determine the amount of debt that your child will need in order to graduate from his studies.

You should also ask yourself the level of responsibility you want your child to assume in paying off the loan. Finally you should sit down with your child and try to work out a repayment plan in paying for the loan.

Fafsa - Free Application For Student Aid

FAFSA is Free Application For Student Aid. This is the first step in all applications for establishing a person's eligibility for federal or private loans. Federal loans are called Stafford loans and will be covered separately. There is a minimum eight-week turn around time so application must be made early. This procedure must be completed online at www.fafsa.ed.gov. Once this has been completed it will generate a form called the SAR or Student Aid Report.

If you do not include an email address on your FAFSA application the SAR report will be sent to the postal address indicated. Some institutions, such as foreign country institutions require the full eight-page SAR and this must be sent to a postal address. Once the SAR has been received, the student is then free to select the financial institution to secure the loan.

To ensure a person understands the entire process of filling out a FAFSA, a trip to the library may be in order. Check with the librarian for directions to start the search. By doing the research up front many of the more common pitfalls can be avoided. As you work through the search process, you may likely discover sources heretofore-unknown companies and businesses that offer student loans. Some of the larger libraries may even have a computer section where you can file the FAFSA application.

The FAFSA process will also list the state resources and funds available. Often these sources are overlooked. There are state student loan agencies that are available but too often the prospective student doesn't even know they exist. By using the FAFSA process, all available resources are thus listed. Because this is a lengthy process and the loan application is also at times lengthy, one should start as early as possible to ensure compliance in time for classes to begin.

Direct Student Loan Consolidation

Student loans are two-edged swords. Without them, you couldn't pay for that degree you worked so hard for. On the other hand, without them, you might actually get to keep the amount you pay out every month for yourself. You might get to pay your other bills on time, afford a more reliable car, or find a better place to live.

If repaying your student loans is challenging your budget, or worse, putting your finances - and credit rating - in the red, you might want to think about a direct student loan consolidation.

With a direct student loan consolidation, you exchange your outstanding student loans with their higher interest rates for one loan with a more manageable, fixed interest rate.

A direct student loan consolidation may be the answer to more than one problem. If you have struggled to meet your monthly payments and in fact have used every option for deferment or forbearance your current loans offer, or find yourself about to default on your loan, a direct student loan consolidation can mean a fresh start. A new loan is often a clean slate.

Not only do deferment and forbearance options become available in case of need again, but often direct student loan consolidation gives you a much lower interest rate - as much as 0.6 percentage points - thereby lowering your monthly payments. And when you consolidate those student loans under a new loan, those loans show up on your credit report as paid off, and your credit score benefits.

There are four plans for repaying a direct student loan consolidation that you many want to investigate as you consider which is best for your needs.

The first plan is a Standard Repayment Plan and gives you a fixed monthly payment for up to 10 years. The Extended Repayment Plan also sets fixed monthly payments, but the repayment period is set between 12 and 30 years, according to the total amount you borrow. In this plan your payments are lower because they are spread across a long period of time. Keep in mind, however, that making payments over longer periods of time means you will end up paying out a larger total amount.

The third option is the Graduated Repayment Plan. This is another direct student loan consolidation plan with a repayment period between 12 and 30 years, only in this plan the amount of your monthly payment will increase every two years.

Finally, if you have a job and family, the Income Contingent Repayment Plan may be what you're looking for. This plan sets a monthly payment based on your annual gross income, family size, and total direct student loan debt, and spreads those payments over a period of 25 years.

While direct student loan consolidation may be the best way to get on top of student loans for some, if you are close to paying off your existing loans, it may not be worth it in the long run to consolidate or extend your payments.

However, if you are still seeing loan payments coming out of your pocket well into the future, consider the direct student loan consolidation seriously. If you consolidate your loans while you are still in school, you may qualify for a 6-month grace period before repayment begins. You may find you will be able to keep any subsidies on your old loans.

Lower your monthly payments, improve your credit rating, gain control of your loans, and give yourself peace of mind about the future with a direct student loan consolidation.

Department Of Education Direct Student Loans

There is a little known option available to students who need financial assistance. This is a direct loan available from the Department of Education. .

You can obtain an application by either calling the Department of Education or going online. Doing a Google search will bring you to their website. From there, you can get all the information you need to apply.

You can apply for two different types of direct loans - subsidized and unsubsidized.

A subsidized direct loan means that the amount of credit you receive is based on the tuition you need.

As long as you are in school, you will not be required to make a payment and you will not be charged interest. This is the best option.

An unsubsidized direct loan means that there is a limit to the amount of money you can borrow. With an unsubsidized loan, the amount that you require is not taken into consideration.

There is considerable interest charged to both these types of credits that you will be responsible for paying.

Loan Amount Restrictions

The maximum amount for a subsidized loan varies depends on what year you are in college. An undergraduate can receive a maximum of $2,625, and the maximum you can receive on an unsubsidized loan is $4,000.

For the second year of college the maximum increases to $3,500 for a subsidized direct loan and $5,000 for an unsubsidized loan. For the remaining years that you are in college, a subsidized loan remains at $5,500. The limit for an unsubsidized direct loan does not increase for the remaining years.

If you are a Graduate or professional student, the maximum you can borrow on a subsidized loan is $8,500 per academic year. Graduate and professional students who apply for an unsubsidized direct loan can borrow up to $10,000 per year.

Consolidation Of Student Loans

Paying for college can be a real hassle especially when you graduated from your school almost a decade ago. Many graduates think that the six months they have before the required scheduled repayment of their various college debts is an eternity. The six months is nothing compared to the years of payments ahead of you. A consolidation of student loans can make the monthly much less painful.

I used to have three separate student loan bills. Two were for my undergraduate studies (which I have decided I actually couldn't afford) and one was for graduate school (which I definitely could not afford). Paying all three bills in a timely manner was a real headache for me.

Part of the problem lies in the simple fact that I have trouble remembering to complete tasks that I really don't want to complete. There must be some kind of subconscious thing going on here that I haven't come to terms with as of yet. The best solution for me was to get a consolidation of student loans.

The process of finding a lender that will accommodate your needs is no problem at all. In fact, many of these lenders come to you. A consolidation of student loans has helped me keep track of my account much easier and it afforded me a few extra dollars each month. Actually, I save about 150 bucks each month through the consolidation.

This extra money is wonderful but I also like to put a little extra on the principal each month. This is a great way to knock down the principal quicker and avoid paying too much interest. I find that the smaller monthly payments I got through the consolidation of student loans helps me make an extra payment here and there. This makes a world of difference.

The other benefit of choosing a consolidation of student loans is the interest rate itself. Even though you are refinancing the debt you will still receive an excellent rate of interest no matter what your credit is like. This is a great benefit for anyone who wants a consolidation of student loans without the fear of hiking interest rates.

I chose to take this route about two years ago and I definitely made the right decision. I have smaller payments as well as the promise of paying off the entire debt in less time than I though I would. A consolidation of student loans is a great way to gain control of this monster of a debt.

Consolidating Your Student Loans

Student loans are just as burdensome as any other loan and in some cases students have several loans taken out in order to pay for college. This is where student loan debt consolidation comes in with a plan of consolidating all of an individual's student loans into one manageable loan.

You need to get your facts by researching various places before you apply for one of these consolidation loans. Only certain types of loans can be consolidated under this type of loan and you will need to check. You cannot include loans such as credit cards, loans from family members, or automobile loans in the student loan consolidation.

The obvious benefits to consolidating a student loan are that there will be a single payment, probably a lower payment, and one fixed interest rate. The fixed interest rate is especially attractive because this helps a person set up a budget easier.

Of course the drawback to a fixed interest rate in this type of loan is that you may not be able to take advantage of future drops in interest rates if they occur.

Another drawback to student loan debt consolidation is the length of the term. It could be that you end up paying this loan longer than you would have otherwise and in the end pay more total interest. So be careful to get all of the data about your student loan debt consolidation loan before you sign the agreement..

Finally, you need to determine if consolidation is really for you before doing it. It may be that you want to pay off the loan faster as student debt consolidation loans tend to stretch out longer. But for most it is an attractive way to get your payments down and manage your student loan debt

Check Out Credit Cards For College Students

Beginning college at some far-off university can be a tad intimidating to say the least. Okay, let's be honest; it's down right scary. Suddenly you're on your own, without mom and dad there to bail you out. Bills start to stack up. While rent and food can get pricey, try not to forget about other expenses such as gas/public transportation, the cost of classes, text books and cash for any fun you intend to have on the weekends. Naturally these expenses can get overwhelming for many, but it's crucial to remember one thing. You don't have to do it completely on your own. Sure, you may already have a job and student loans or grants, but don't dismiss the obvious. I'm talking about credit cards for college students. There is a reason why these can come in handy.

The moment you hear the words credit card, you probably assume debt, debt and oodles more debt. This is not exactly the case for college students. Ah ha, there really are some advantages to being a student. While credit cards are notorious for having utterly awful APRs, which are annual percentage rates; many credit cards for college students lack this burden. Yes, you can actually apply for a student credit card that doesn't instruct you to fork out 18 percent every month. It's common for credit cards for college students to have a 0% APR as long as they keep the charged balance below a certain figure. So if you're only aloud to spend 400 dollars or you get hit with an APR of 10-20 percent, you'd better keep the balance below 400 dollars.

Modern credit cards for college students are actually a great asset. You can literally spend money you don't have and simply pay it back down the road, without having to grapple with interest rates. Enjoy this perk while it lasts, because it fails to exist in the adult world. Some sites you may benefit from checking out for student credit cards are creditcards.com, llegeboard.com and chase.com. Just be certain you read through all the fine print before applying for a specific credit card for college students. Sometimes credit card companies attempt to mask additional fees.

Budgeting For Your Student Credit Card

When you use your student credit card, you must ensure that you have sufficient funds to cover your balance of your statement. This article will give you an indication why you must only spend with your credit card what you have available.

To start this off, think about your life as a high school student and what has happened so far. For most high school graduates who have lived with their parents through their teenage formative years, they have not had to worry about finances. Coming onto campus with little knowledge of finances can be a tough combination with the rewards that credit card companies are willing to offer if you open up a credit card. The first key when thinking about budgeting for your student credit card is to read what you are signing up for. The rewards you will receive for signing up for a new credit card pale in comparison to the finance charges if you run up a balance on your credit card.

Take this fact into consideration when you are filling out a credit card application. The average graduate from college owes roughly twenty-two hundred dollars on credit cards, according to Nellie Mae who leads the nation in student loans. If you think about this fact and how long it can take to pay back this money when including interest, you would probably not take out that credit card.

If you have $2200 in credit card debt and your interest rate on the card was twenty percent, you would be paying over four hundred dollars in interest. Most students feel that they will pay this back when they graduate and make money in the real world. What is not often considered is how long this can take to pay back and it can be difficult to pay this back with other living expenses such as rent, car payments, insurance, and the list goes on. What seems like a big check often is much less once you have taken into consideration the costs of living everyday life.

To make sure you are correctly budgeting for your student credit card, you should only spend what you can pay for. This should be included in a monthly budget if you need to. Some students will only put gas on a credit card or groceries and have that money sitting in their checking account at the end of the month. Taking the time to understand when you should spend money and not spend money is a key to making sure that you properly maintain a disciplined budget with your credit card. Budgeting and not spending beyond what you can pay for is a skill which must be learned at a young age. If you do not develop this habit at a young age, you could find yourself continuing with the same habits as you get older. This can partially explain why the average American household owes roughly nine thousand dollars in credit card debt.

Hopefully this article on the importance of budgeting for your student credit card has explained why it is so imperative. Seeing the type of credit card debt the average student finds him or herself in should explain completely why you want to budget for your student credit card.

Borrowing Student Loans Responsibly

As you may know, student loans are today's largest form of student aid. Researches have found out that it made up to 54 percent of the total aid awarded every year. However, with the rise of student loans, several cases of student loan defaults occur. The student loan debt is even today's one of the major problems of most student borrowers. It is rising every year and the college expenses as well as the graduate school costs have definitely gone up faster than inflation.

Well, let me tell you that this case often surface when you take a particular loan then another student loan followed by another loan. It is often said that as much as you take student loan offers, your loan debt gets bigger and bigger. Since the case for student loan debt always happens and it carries certain burdens to the attainment of the student's dream of higher education, it is then important that you consider some steps that will help you lower or manage your debts.

Perhaps one of the most necessary things to consider is to borrow loans responsibly. Think Before Your Borrow Many people find it easy to rush through the student loan process. However, if you take a minute considering some of the money saving tips mentioned below, you could save yourself some bucks in the long run. So, read on.

Falling Into the Loan Trap? Oops! Avoid it! Most of the time, you may find it tempting to borrow up to the maximum amount. Well, this is what many people call as the "loan trap".

It is the case where you borrow the maximum amount of money from the student loan lending company or institution even if it is more than you can afford to repay. It often occurs for the fact that need-based loans are very easy to apply for and they don't usually require payments while you are attending your degree.

So, to avoid certain consequences as you enter the repayment period, you should avoid the loan trap. How Much Loan Do You Actually Need Before you consider borrowing a student loan for your college, think first how much loan you really need. Always note that when taking out student loan, you don't have to borrow the entire amount which is usually specified in your award letter.

Just borrow what is enough. Reduce Your Loan As Much As Possible There are several options available for student loan borrowers. But, before opting for one, it is necessary that you question yourself if you can hold down the expenses; if you can work more, either in the academic year or during vacations; or if there are scholarships available for you. It is often said that if you minimize spending or bring in more money, the amount you have to borrow for your education tends to go down. Consider Student Loans with the Best Terms Note that the lower the interest rate, the less pricey the student loan is.

This actually means, the less you will have to repay for your student loan debt. For your own sake, here is what your batting order should be (from the least expensive): Student Loans 1. Federal Perkins Loans 2. Federal Subsidized Stafford or Direct Loans 3. Federal Unsubsidized Stafford or Direct Loans 4. Alternative or Private Loans

As you may know, most of the students thinking for student loans have access to a special loan source these days. These sources, like the Air Force Aid Society, have student loans terms that are comparable to the Perkins or Subsidized Stafford or Direct Loans. Of course, it may be worth your time to look into the possibilities. T

here are some sources these days that offer low-interest student loan programs, and perhaps one of the most resourceful is the College Board's online Scholarship Search. Parent Loans 1. Federal PLUS Loans 2. Private Loans or Alternative Loans As mentioned, there are two available forms of education loans for parents.

These programs are what commonly offered by some colleges anywhere in the world. But, for great chances of availing the benefits of such programs, it is best to check with your financial aid office to see if the school you wish to attend offers its own loan program. This will also allow you to know if you qualify for the loan, before you submit a PLUS loan application. How Much Should You Borrow? Many experts agree that you should borrow only as much as necessary.

As mentioned earlier, it is often tempting to borrow whatever you are offered or are eligible to borrow. However, it is necessary to think first carefully about hoe much you really need, as well as to consider other possible options. Always note that there is actually no need for you to borrow the entire amount shown in your award letter.

And, even more important is that, never plan to borrow as much as you can up the yearly limits because if you do so, expect yourself to be deep down in debt. Consider Options That Will Reduce Your Loans If you are thinking for borrowing money to support your education, try to ask yourself first if you have savings left that you can use instead of taking out a student loan from the school of your choice.

Also, think if you can get by with less by way of holding down expenses, or if you can do something great, like working more, either in the academic year or during vacations just to support your education.

Also, think for the possible scholarships that you can apply for, or you can be qualified for. There are actually a lot of options left for you out there. The best move to take now is to know and understand them. Estimate Your Loan Payments It is worthy to note that the more you borrow for your education, the higher is the amount of your monthly repayments will be once you finish your degree.

So if possible, try to estimate your loan payments. There are a number of student loan repayment calculators out there that you can use to do the math. What's more, you have the chance to calculate your monthly payments based on the estimated starting salary of your chosen occupation. The Essential Borrowing Tips Now that you have pondered enough about your student loan with the things you have to consider before borrowing, as well as with the amount you need to borrow, I guess it is now important for you to look at the most recommended tips for borrowing student loans.

Just consider the following: 1. Start by looking at the award letter given to you by your servicer. From the letter, figure out which need-based loans you have been qualifies for and for what amounts. 2. After looking at the full financial picture, such as the awarded aid, education cost, and family share, you should then consider settling on an amount that you actually need to borrow. 3. The rule is: never borrow more than you need. Always note that as a student loan borrower, you are not required to take the full amount of the loan you have been offered. 4. Don't ever forget about student employment as an alternative for borrowing. Even though working at a job can seem like an extra burden for students, so is struggling with high loan repayments after college. 5. Apply for the student loan right away. This is very necessary especially if you want to ensure that the loan is approved as well as the money paid to the college before you have to make your first student account payment. 6. The key to successful application is to follow the loan application instructions carefully. Note that any mistakes you make will delay receipt of the funds. 7. When you are applying for a Stafford or Direct student loan, be prepared for the amount that is paid to the college to be less than the amount you signed for. Usually, a fee of up to four percent will be deducted from the student loan. This deduction occurs before the check is sent to the college of your choice. 8. If you already figured out the exact amount you are borrowing before any borrowing process begins, you should start keeping track of your student loan tab, which is what your monthly repayment amount will be after you graduated from college. There are student loan calculators out there than can do the math for you. 9. If instances occur that you find yourself needing more than the amount that's been offered in your award letter, it is necessary to contact with a financial aid counselor before taking on an additional loan. 10. And, if you do take on an additional, unsubsidized loan, just consider making interest payments while attending your degree. The interest won't be much and this will help you save money. If you delay or capitalize the interest payments, you will end up having to pay back significantly less than. As mentioned, planning and thinking your moves for taking out student loans is very necessary for a successful borrowing. If you do consider what have been mentioned above, then there is no doubt for you not to attain your dream education, and even a successful career in the future.