What Is Federal Student Loans
Federal student loans are a great option if you are enrolled in college. They let you borrow money at a low interest rate and also come with repayment options that can help make your payments more manageable. However, there are several things to consider before taking out federal student loans. In this article, we’ll cover the basics of federal student loans so you know what to expect when submitting your application.
The federal loan process starts with you completing the FAFSA
Once you have decided to apply for federal student loans, the next step is to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is a form that asks questions about your income and expenses. It also asks about who you live with and if they have any financial resources.
You can get the FAFSA online at www.fafsa.ed.gov or pick up an application in person at your school’s financial aid office or Federal Student Aid Information Center (FSAIC)
Once you submit your FAFSA, it will be processed by one of four regional service centers: Central Processing Services (CPS), California Processing Center (CPC), Great Lakes Higher Education Guaranty Corporation (Great Lakes) or Iowa College Aid Clearinghouse (Iowa). If you need help completing the form, see page 21 for tips on asking questions before submitting it!
There are several types of federal loans
There are several types of federal loans.
- Stafford loans. This type of loan is available to undergraduate and graduate students, as well as parents of dependent children. The amount you can borrow depends on your status as a student, family size, and cost of attendance at your school. If you’re attending school full time during the fall and winter semesters, you can borrow up to $5,500 per year (up to $7,500 if you’re studying medicine). If you’re studying part time or attending summer school only, the maximum amount is $3,500 per year (or $4,500 if medical).
- PLUS loans. These are available only for parents who want to help their children pay for college expenses through additional education debt. Parents must meet certain criteria in order for them to qualify and receive this type of loan; however it can be more beneficial than other options because interest rates tend to be lower than those associated with private student loans (which we’ll discuss later). In addition there’s no origination fee associated with PLUS loans unlike many private lenders who require one upfront before issuing any funds from them!
- Perkins Loans . This type of aid was designed specifically by Congress back in 1958 when they created an endowment fund called Federal Supplemental Educational Opportunity Grants under Title IV section 4011(a)(2)(B)(i)(I) consisting solely out-of-pocket money provided by both public institutions themselves along side private corporations like IBM Corp., Exxon Mobil Corporation along other major employers across America today such as Walmart Stores Inc., Target Corporation etcetera!
Federal student loans have fixed interest rates
Federal student loans have fixed interest rates. This means that the interest rate on your loan stays the same for the life of your loan, making it easier to budget and plan. Interest rates are set by Congress, so they change from year to year.
Federal student loans typically start at less than 5%, but can increase if you’re late on payments or if you don’t make enough money to repay them (you can check out how much income-based repayment will be for you here).
Federal student loans have deferment options
There are four deferment options for federal student loans: unemployment, economic hardship, military service and school closure.
The first three deferment options are available only if you have a Federal Direct Loan. The fourth option is available only if you have a Perkins Loan.
To get a deferment on your federal loan because of unemployment or economic hardship, contact your loan servicer (the company that processes your payments). You’ll need to fill out paperwork and provide proof of the circumstances that qualify you for this type of postponement.
If you’re applying for unemployment or disability benefits from an employer-based insurance program, notify Sallie Mae—not the Department of Education—before filing any claim forms so we can adjust any payments due as needed.
You need to be enrolled at least part-time to get federal loans
If you want to apply for federal student loans, you need to be enrolled at least part-time. If you are a full-time student and want a federal loan, then check out private student loans. This doesn’t mean that if you’re not currently enrolled as a full-time student that it’s impossible to get a federal loan; however, the interest rates can be higher than they would otherwise be if they were not required by law.
Federal student loans are a great option if you are enrolled in college.
Federal student loans can be a great option if you are enrolled in college. The process starts with you completing the FAFSA and then the lender will determine how much money you qualify for. There are several types of federal loans available, but they all have fixed interest rates and offer deferment options. In order to receive these benefits, however, you must be enrolled at least part-time in an eligible program at an accredited institution.
When making the decision to go to college, it’s important to understand all of your options. Federal student loans are a great way to make college more affordable, but they may not be right for everyone. If you want more flexibility with repayment terms or higher amounts than what federal loans offer, then you might want to consider private loans instead. Whatever option makes sense for your financial situation will depend on how much money you have saved up already or what type of repayment plan might work best for you as well as other factors like income level and credit history (or lack thereof).