Many of us rely on government student loans to fund our education. They usually have low interest rates, are easily available with often no credit checks, and Universities will usually help you find them. When we fill out the FAFSA in search for Federal Aid, government student loans and grants is exactly what we are looking for. They provide great deferment options and long repayment periods that can usually be extended. I want to give you a background and some of the research I’ve found on government student loans and what to expect.
Who funds the Government student loans?
It is actually not the government that provides the finances for these student loans. Private organizations provide the necessary means for your education in accordance with the Department of Education through 2 programs which I have stated in previous articles, the FFELP and the FDLP. There are many different student loan programs. Check with your college or potential college to make sure you are applying for the right ones. Each college is different in the programs they participate in.
The faithful Stafford Loan
Stafford loans are probably the most common government student loans. They are federal loans made directly available to college and university students and supplement resources such as grants, scholarships, and work study. I have done work study all 4 years of college. The experience I gained, while helping to pay for my tuition was one of the best aids I received. The Stafford loan can come subsidized or unsubsidized. Subsidized means the government pays the loans interest while you’re in school, obviously being a better way to go. Unsubsidized student loans requires you to pay all the interest, however you can have these payments deferred after graduation.
In order to receive a subsidized Stafford loan you have to show some sort of financial need. This includes your family. I was able to receive a subsidized student loan last year by claiming myself as an independent on my taxes and FAFSA. This helped the amount I received because I was not under my parents income. If your family makes over $100K then there is only a 10% chance you will receive a subsidized Stafford loan. If it is less than that you have a pretty good shot.
Stafford Loans have limits. It depends on your status in school. If you are a freshman you can receive up to $3500, a sophomore $4500, and $5500 for Juniors and Seniors. Some majors have higher limits like medical school etc…
The other Government student loans
There are other government loans worth looking into and doing your research on. They are not as prevalent as the Stafford loan but can significantly help fund your education. Last year there was $31 billion in unmet financial need. That is a lot of money that was not given out. Don’t be the student that doesn’t get the financial aid they need. Other loans which I have mentioned in other articles is the Parent PLUS loan, which your parents can apply for. This loan differs from the Stafford or Perkins loan. The other loan that is popular among undergraduate students is the Perkins loan. It is a low interest loan (about 5%) for both undergrads and graduate students. With a Perkins loan the school is your lender. The loan is made with federal funds and your school contributes a piece of the pie. You pay back the loan to your school. It is a great loan because it is set at a low interest rate and you conveniently deal directly with your school as opposed to some outside company.
Now go get a Government student loan.
From one student to another, I strongly recommend a government student loan to help fund your education. The interest rates are fixed and the school will urge you toward this. I have subsidized and unsubsidized its OK to have both and you can consolidate them when you graduate. I love going to school and can only imagine if I was unable to pay for it. If you need help there is help out there and lots of money to be had.
