In this competitive era, many students rely on student loans to pay for higher education. This is because college has become an expensive affair! Family contributions and personal savings prove to be insufficient in most cases. Similarly, all students don’t qualify for promising grants and scholarships. This is when student loans become handy and essential, especially those that do not require a cosigner.
Applying for student loans is an interesting and challenging process. Apart from private loans, most students and parents prefer Federal student loan programs. Thus, you should explore the topic of federal loans fully before opting for the private ones. Always remember that applications for federal loans and private loans are completely different.
Different Types of Federal Loans
- Federal Perkins Loan
Federal Perkins Loans are meant for students with very low financial backgrounds. It is a low interest loan that can be obtained by undergrad and post graduate students. The loan allows for a grace period of 9-months. Unfortunately, Federal Perkins Loan is not offered by all colleges. Thus, you must check if your college/school offers the financial aid.
- Direct Subsidized Loan
Direct Subsidized loans are controlled by Federal Regulations. This is another interesting and accessible loan for students with poor credit scores. Borrowers don’t need to worry about any interest during college and the later period.
- Direct Unsubsidized Loan
Similarly, students can apply for Direct Unsubsidized Loans. As suggested by its name, the loan is not based on the borrower’s financial status or needs. The educational institution determines if the student qualifies for the loan or not. And, all interests charged during school and the grace period will be capitalized.
- Direct PLUS Loan
The list of federal loans would remain incomplete without the Direct PLUS Loan. This is an unsubsidized loan for professional students who are dependent on their parents or family. Unlike many other loans, the Direct PLUS Loan capitalizes interest at all stages!
Making an Application
To apply for a Federal Direct Loan, you should fill a short application. The entire Federal student loan application can be done for free! The Free Application for Federal Student Aid (FAFSA) is a comprehensive application that can be completed in few short minutes. Apart from Federal Student Loans, the Free Application for Federal Student Aid will state if you are eligible for many other scholarships and grants. Always remember that FAFSA is required for all Federal Student Aid programs. Here are few tips on how to host the FAFSA application:
- Remember to host the FAFSA applications on time. Always stick onto deadlines and try to submit your applications few weeks before the last date!
- All paperwork must be complied several weeks ahead of time! Documents that play an integral role during FAFSA applications would be your SSN Number, Driver’s license number (optional), Alien Registration number (for non-US candidates) and investment account numbers. These documents should be within reach at all times.
A Precautionary Move
Last but certainly not least, you should be extremely calculative before hosting a loan application. Use a reliable tool to balance your savings, loans, income, grants and scholarships.