US student loans
Education is something that can be got through out your life. Higher education is so important in today's world to get a white collar job. Most of you would want to get higher education from a good college. But the only factor which holds you back must be the high fee structure. If that is the only factor stopping you from getting a degree, then you don't have to worry about it anymore.
Nowadays there are lots of government and private institutions providing student loans for various degree and post graduate programs in United States and else where. They are easy to procure and they also can be repaid in easy installments after you complete the course and earn a job.
The Department of Education provides the Direct Loan Program. It is one of the Federal Student Aid (FSA) programs and it provides students to borrow money in a simple and inexpensive way to pay for education after high school. You can apply for FSA by filling out the Free Application for Federal Student Aid either using paper or by using the online version.
Most of the schools participate in the Direct Loan Program. If your school is one of them, you'll then need to complete a master promissory note (MPN) to get a Direct Loan. This note explains terms to avail loans and is also the legally binding agreement that you will repay the Department on the promised time. The Direct Loan Servicing site provides online entrance and exit counseling tutorials on the procedures to get a direct loan.
These programs provide more than $60 billion a year in grants, loans, and work-study assistance. Department of education is just one of the organization that provide loans. Apart from it there are various organizations providing it. There are various types of loans.
Sallie Mae is the largest provider of graduate loans in the US, federal loans being one of them.
Federal Loans:
Federal loans are the largest source of education loans. You and your family can get these loans through private financial institutions.
These loans provide more favorable terms than any other private loans.
Federal Stafford loans:
Federal Stafford loans are low interest loans with fixed rate available to undergraduate students attending affiliated schools most of the time. These loans are the most common source of college loan funds.
Eligibility:
• Free application for federal student aid should be submitted
• You should be having financial need as determined by your school, for subsidized Stafford Loans.
• You should be a U.S. citizen or national, a U.S. permanent resident, or eligible non-citizen.
• You should be enrolled full time or at least half time in a recognized university before applying for
this loan.
• The university or school you enroll should be a participant in the Federal Family Education Loan Program
• You must not owe any refund in any previous education loan/ grant.
Features:
• Sallie Mae lenders offer borrower benefits on Stafford loans. That way you can save your money during repayment.
• Flexible repayment and consolidation options are available.
• No payments are required while you are in school at least half time.
• You can get life-of-loan servicing from Sallie Mae.
• You don't have to worry about any prepayment penalty.
• No credit check is required.
• Six month grace period is given and no payments are required immediately following your graduation or dropping to less than half-time status.
Loan limit:
The Annual Loan limit for dependent ranges from $2,625 to $5,500 and for an independent it ranges from $6,625 to $138,500. The loan limit depends on whether you are a freshman, graduate, professional, sophomore, junior or senior etc.
Interest rate:
For Stafford loans disbursed from July 1, 2006, the interest rate is fixed at 6.8%.
Interest rate varies for Loans disbursed before July 1, 2006. They are adjusted annually on July 1, capped at 8.25%. The current rate through June 30, 2007 is 7.14% during repayment and 6.54% during in-school, grace, and delay.
Repayment
• Standard repayment: Both principal and interest payments can be made on a monthly basis for up to a 10-year repayment term. This plan has the lowest total interest rate.
• Graduated repayment: According to this you can make reduced payments in the early years of repayment and increased payments thereafter within the maximum 10-year period. Total loan cost is higher in graduated payment than with Standard Repayment.
• Income-sensitive repayment: In this Payments are a percentage of your gross income. You must reapply every year for this plan and payments are adjusted annually to reflect changes in income. With here also you have a higher total loan cost than with standard repayment.
• Extended repayment: If you have a high student loan debt, you may be eligible for up to a 25-year repayment term and the choice of standard or graduated payments to keep payments affordable. With extended repayment, you have a higher total loan cost than with standard repayment.
Apart from federal Stafford loan, other loan types are Federal Perkins loan which has a low rate of interest (5%) for undergraduate and graduate students with exceptional financial need and Graduate plus Loan for students going to graduate school and can has the facility to borrow the full cost of your education. There is also Parent Plus loan for parents of undergraduate, dependent students. With this loan parents can fund the entire cost of their child's education.
Other than Federal loans you also have Private loans which are designed to provide additional funding after a borrower has maximized his or her federal loan eligibility. You can borrow them from your school or from other private financial institutions like banks. Private loan terms can vary depending on the credit history.
With all the available loans it's easy for a student to get educated and then repay the institute after a certain period. Loans are playing an integral part of a student's life these days as the education expenses are going up each year. But with institutes providing loans for various programs everyone can make their educational dreams come true.
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