Simple Reality About Federal Student Loans

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<h1>Simple Reality About Federal Student Loans</h1><strong> Author: <a href='http://www.articleseen.com/profile_Milana Grade.aspx'>Milana Grade</a></strong><br /><p>Loans by the federal government are popular ways to finance your education if you like to receive sufficient funding with exceedingly low interest rates. Direct Loan Program is the program under which federal loans are provided. The main truth is, until 2010 there was Family Education Loan Program under which federal loans were offered for people. According to this program students were able to receive federal funding from private lenders and the funding was from the government through banks. Today this loan education program is unavailable and was eradicated by the government. Students can borrow directly from the government. In other words, private lenders (banks and financial companies) are not needed. Student loans by the federal government are comparable but have contrasts. There are three variations of federal loans: Stafford, Perkins and PLUS loans. Each loan category is similar with others but is different at the same time. The Perkins loan is for people who have financial need. “Neediness” is meaning that students do have financial need. Financial need and low income don't allow them to attend college they want. Perkins loans can become helpful in this situation. Unfortunately, not all students receive funding due to limits on students and money to be received. Application process always starts by submitting the FAFSA form. There are quite a lot of ways (mail, web) and the most trendy is sending electronically via web. Stafford loans can be considered as the top because about 80% of all borrowers qualify for them in the end. Students who have received sufficient funding for college say that this loan is easy to qualify for. They are offered in two varieties:: Subsidized and unsubsidized. Students who demonstrate financial need can qualify for subsidized Stafford loans. This type of loan is similar with Perkins loans. The divergence is that Perkins loans are for college students with significant financial need. But the phrase “subsidized” the government means that it pays the interest for a borrower. Therefore, a borrower owes only the main sum he must pay back. In other words, there is no interest paying involved. Unsubsidized Stafford loans are presented for student despite financial need and very nearly every one of college students qualify. Nevertheless the government does not "subsidize" this loan by paying the interest. In this case, a student has to pay the loan plus the interest that can accrue. PLUS loans are also Federal loans offered for graduate students and parents. PLUS loans are different from other two categories and the core difference is that they are based on credit-worthiness. Having the best credit history is incredibly important to be able to qualify for this loan. This category of federal student aid is dealing with credit-based criteria. It means that a borrower must have high-quality credit history or a credit worthy cosigner. A student could not qualify if he doesn't meet requirements. This kind of federal loans is not cared about financial need of borrowers. It doesn't if a borrower has low-income or financial troubles. Only a borrower is responsible for it. So, a little risk involved. Summing up, there are 3 varieties of federal loans (Perkins, Stafford, PLUS) obtainable for students by the federal government. The most essential approach that really helps to gain more from federal loans is to analyze each type and figure out the strongest features.</p><strong>About the Author:</strong><br />Milana Grade is an author of numerous <a rel="nofollow" href="http://www.studentaidanswer.com/">student aid</a> articles. She runs her website covering topics like <a rel="nofollow" href="http://www.studentaidanswer.com/no-cosigner-loans">student loans for students without a cosigner</a> and <a rel="nofollow" href="http://www.studentaidanswer.com/federal-loans">federal government student loans</a>. Visit her site today.<p> Article Source: <a href='http://www.articleseen.com/Article_Simple-Reality-About-Federal-Student-Loans_110621.aspx'> http://www.articleseen.com/Article_Simple Reality About Federal Student Loans_110621.aspx</a></p>

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Category : Finance : Loans