Ford Student Loans
There are a number of students who are applying for higher education these days but with the cost of education rising every year t becomes difficult for these students to arrange for funds. If you are looking forward to further education but you are facing problems for arranging of funds then you can opt for ford student loan.
The Ford student loan is named after William D. Ford. These loans are given out by the Federal Government and are given out depending on the financial need of the student. The Ford student loan can either be subsidized or unsubsidized. These loans consist of Stafford and Plus loans and are directly sponsored by the Federal government. This loan program was established in the year 1994 for students attending college. When you wish to apply for the Ford Student loan you are required to fill the Federal Application For Student Aid (FAFSA). Once that you have filled the form and submitted it the U.S Department of Education would go through the applications and analyze the financial condition of the student based on the information provided in the form.
If the Department of Education feels that the Student is eligible then the loan amount is dispersed to the student. Let us look at the types of Ford Student Loan in detail:
Stafford Student Loan: The Stafford student loans are low interest loans that are given out to the student under the Federal Family Education Loan Program. In case the need of the financial requirements is met then the government can subsidize the loan. When the Stafford student loan is subsidized then the interest payments are charged only after the student has finished the education and he would also get a grace period of 6 months before the interest rate is charged on the loan. In case of the Stafford student loan the government guarantees the loan but private lenders, banks and credit unions give out the loan.
The Stafford student loan can also be unsubsidized in nature. These loans are given to students without assessing their financial capacity. The interest rates are charges when the student starts college or university. However the student is allowed to accumulate the interest rate and pay it off with the principal.
Previously the interest rate on the Stafford loan was based on an adjustable formula. With this rule the rates were adjusted annually and were based on the 91-day T-Bill. But since 1st July 2006 all the Stafford loans are issued at fixed interest rates. For most of the loans providers and the direct laons the rate is set at 6.08% presently. With the present rates being effective some of the loan providers are foregoing the margins that they are entitled for under the Federal program.
PLUS loans: The PLUS laons are made available to the parents of the dependent undergraduate students. There are two types of PLUS loans made available under Ford student loan. These are the Direct PLUS loans and the FFEL PLUS loans. Both of these loans are unsubsidized in nature i.e. the interest rates are charged from the day the loan is given out.
With the help of PLUS loans the parents can borrow an amount that would include the total cost of the education including the lab expenses, the supplies, and the room and board. These loans are given out on the basis of credit histories making it possible for anyone to apply for these loans. The interest rate for these loans is fixed at 8.5%.
The parent is not supposed to give any collateral for the loan and if the parent wishes to pay off the loan earlier than the maturity of the loan then he can do so without paying any pre payment penalties, besides these loans are available quickly. The interest rate charged on the Plus loans is tax deductible.
To be eligible for the Federal Plus loans the parent is required to be either a U.S citizen or a non-eligible citizen and should be able to meet with the creditworthiness of the federal minimum standards. Besides this the student is also required to be a U.S citizen or an eligible non-citizen. The student should not be married and should not have any dependents. Besides this the student is required to be less than 24 years of age.
The interest rates on the Plus loan are adjusted on the 1st of July every year. This adjustment is established on the last 91-Day T-Bill rate in May. The borrowers are required to pay the rate on the 91-Day T-Bill + 3.1%. The interest rates are capped at 9% for the borrower for the term of the loan so that in case the rates rise then you would not have to pay an amount more than this determined amount. The Plus loans have a government origination fee of 3% and a guarantee fee of 1%.
The ford student loan is a useful aid and the student can easily apply for these loans. There are a number of benefits attached to the ford student loan and can help the student in getting the required amount. However there are times that the amount obtained by these laons would not be sufficient to cover the cost and the student would have to apply for additional aids. When filling out the ford student loan form you should be careful and make sure that you have filled in all the required information. If you wish to apply for these laons you are required to do the groundwork and you should make sure that you fill the application on time.
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