Student Loans for College

Now that you have received that acceptance letter from your chosen ivy league school, a question suddenly pops into mind: To loan.. or not to loan? If you’re not lucky enough to receive financial aid through scholarships or grants, you may as well consider getting student loans for college. Unlike the first, loans need to be repaid and getting one can be very confusing. Know that these student loans for college are major responsibilities which means you really need to plan on getting the best deal in town. You may run away from your credit card bills, but not with student loans. Your loans won’t simply be forgiven and the bad record will stay with you.. for life. Scary? Not really.

What Types of Student Loans for College Can You Apply For?

Getting student loans for college is a good practice of your sense of responsibility, mostly useful when you step out of school. You can apply for any of these:

FEDERAL LOANS

These are loans sponsored by the federal government, giving college students nationwide the largest source of college loans. You and your parents can get any of these through private institutions like Sallie Mae. Unlike private student loans, terms are more flexible and interest rates are lower. Interest rates are fixed, from 5% to 8.5%, depending on the type of loan and college program. Got poor credit? No credit history? Federal student loans won’t really bug you with these issue. What’s great is that you even get to have a grace period after graduation when no payments are due. You can choose from these federal student loans: Federal Perkins, Federal Subsidized Stafford, Federal Unsubsidized Stafford, or Federal Parent PLUS loans.

PRIVATE STUDENT LOANS

Tired of running after free money and federal student loans? Why not try borrowing from private financial institutions like Chase or Sallie Mae? The interest rates may be higher than federal loans, but you might just get nicer terms, given that you have a cosigner who is credit-worthy. These are unsubsidized loans and you don’t need to show how badly you need a college money. What’s great about private student loans is that you can set your own rate and choose your loan terms. Being this flexible can come with a little cost.

Student Loans for College: Subsidized or Unsubsidized?

These two options can be mind-boggling, but it only refers to your financial needs. Are you badly in need of money? Subsidized loans are your need-based loans, which are given to students whose families are in the low income bracket. To prove that you’re in dire need, you have to file a FAFSA ( Free Application for Federal Student Aid ) form first. Doing this will also help you qualify for grants and student-work programs as well. Subsidized loans have lower interest rates, where the federal government pays your loan’s interest while you are in school.. and up to 6 months after you graduate. How good can it get?! Unsubsidized loans won’t give you all these perks, although you will still get a lower rate if you get a federal unsubsidized student loan.

Are you still having a problem with your federal student loans for college? You can contact the FSA Ombudsman of the U.S. Department of Education to help resolve your issues, in an unbiased manner. You may dial their toll free number: 1-877-557-2575, or fax them at 1-202-275-0549. You can also write a snail mail to: U.S. Department of Education, FSA Ombudsman, 830 First Street, NE, Fourth Floor, Washington, DC 20202-5144. Visit FSA online for more info, or email at: fsaombudsmanoffice@ed.gov

READINGS:

http://www.finaid.org/loans/consolidation.phtml

http://www.collegeboard.com/student/pay/loan-center/433.html

http://www.salliemae.com/get_student_loan/find_student_loan/undergrad_student_loan/student_loan_types/

http://collegesavings.about.com/od/typesofstudentloans/Understanding_the_Different_Types_of_Student_Loan_Programs.htm