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Government
or Federal Student Loan
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Federal loans are an important resource
for many students help finance a college
or school education as these loans have low interest
rates and do require a credit check .They are easy to
be paid back and gives you an extended
repayment
terms Many students rely on federal government loans to finance their educations.
Student loans also provide a variety of
deferment options.
Apply
for Federal Student Loan now ! Click
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Federal programs are the single largest source of education loans. The two primary programs are the Federal Family Education Loan Program
(FFELP) and the Federal Direct Loan Program
(FDLP). The loans available through these programs start with the same terms; however, in the FFELP, your bank,
credit
union, or school is the lender, and in the FDLP, the
U.S. Department of Education(ED) is the lender.
Complete
One Form, Get Up To Four Free Loan Offers
Lower Your Interest Rate
Their are following types
of federal loans available :
1. Federal Perkins Loan
:
- A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need.
- Federal Perkins Loans are made through a school's financial aid
office, it determine whether you qualify for Federal Perkins Loans, and also decide the amount of the loan.
- Colleges that participate in the Perkins loan program have a limited amount of money they can distribute, so they award these loans very selectively.
- Your school is your lender and the loan is made with government funds. You must repay this loan.
- If you are a U. S. citizen or permanent resident, full or part-time undergraduate or graduate
student, then you are eligible for this type of
loan.
- You can borrow up to $4,000 for each year of undergraduate study. The total amount you can borrow as an undergraduate is
$20,000.
- You can borrow up to $6,000 for each year of graduate or professional study. The total amount you can borrow as a graduate/professional student is
$40,000. (This includes any Federal Perkins Loans you borrowed as an undergraduate.)
- A Perkins Loan borrower is not charged an origination fee or an insurance premium. However, if you skip a payment, if it's late, or if you make less than a full payment, you may have to pay a late charge plus any collection costs. Late charges will continue until your payments are current.
- You may be allowed up to 10 years to repay the
loan.
- Minimum payment for his type of loan is $40 per month per loan.
- Student pays no interest while in school.
- Repayment begins after nine months of the date
of leaving school.
- Your school will either pay you directly
(usually by check) or credit your account.
- You'll receive the loan in at least two payments
during the academic year, unless your total
Federal Perkins Loan is $500 or less, in which
case a single payment per academic year is allowed
- The Perkins Loan also offers better cancellation provisions than the Stafford or PLUS
loans.
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2. Federal Stafford
Loans or Federal Student Loans :
- Federal Stafford Loans are the most common source of education loan funds, and are available to both graduate and undergraduate students.
- To be eligible for this type of loan, you must be a U.S. citizen or permanent resident; full- or half-time undergraduate or graduate student. A credit check is not required.
- Federal student loans are either subsidized or unsubsidized.
- Subsidized Stafford
Loan : Subsidized loans are need-based.
The government pays the interest on subsidized loans during the period you are in school. To receive a subsidized Stafford Loan, you must be able to demonstrate financial
need, which was determined by the information you provided on the Free Application for Federal Student Aid
(FAFSA). If you qualify for a subsidized loan, the federal government pays interest on the loan (subsidizes the loan) until you begin repayment and during authorized
periods of deferment thereafter.
- Unsubsidized Stafford
Loan : Unsubsidized loans are non-need
based. You are obligated to pay the interest on an unsubsidized loan,
even the amount that accrues while you are in school. With the unsubsidized Stafford loan, you can defer the payments until after graduation by
capitalizing the
interest.
All students, regardless of need, are eligible for the unsubsidized Stafford Loan.
Independent students are allowed to borrow more than dependent undergraduate students.
- If you are a U. S. citizen or permanent resident, full or part-time undergraduate or graduate
student, then you are eligible for this type of
loan.
- You may be allowed up to 10 years to repay the
loan.
- Repayment begins after nine months of the date
of leaving school.
- Interest
for the Stafford Loan changes every July 1st with
a cap of 8.25 percent.
- For
the 2004-05 school year, the interest for
Stafford/Direct Loans disbursed after July 1998 is
2.77 percent for students while they are enrolled,
during grace
and
deferment periods
(T-Bill + 1.7
percent).
- During
repayment and
forbearance periods, the interest
rate for the 2004-05 academic year for loans
disbursed after July 1, 1998 is 2.82 percent
(90-day T-bills plus 1.7 percent).
- All lenders offer the same rate for the Stafford Loan, although some give discounts for on-time and electronic payment.
- Most of the terms and conditions of subsidized and unsubsidized Stafford loans are the same.
Many students combine subsidized loans with unsubsidized loans to borrow the maximum amount permitted each year.
- If your borrowing needs are not met by the federal programs, lenders offer a variety of supplemental borrowing programs known as Private or Alternative Loans.
- To apply for a Stafford Loan, you must submit the Free Application for Federal Student Aid
(FAFSA). Even though the unsubsidized Stafford Loan is available to all students regardless of financial need, you must still submit the FASFA to be eligible. You can receive a subsidized loan and an unsubsidized loan for the same period.
- You may use the Lender Codes Database to obtain the lender codes of participating student loan providers. If you are a student attending a school that participates in the Federal Direct Student Loan Program you will obtain your federal student loan funds directly from the U.S. government, not from private lenders.
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3.
Federal PLUS Loans
or Federal Parent Loans for Undergraduate
Students :
- The PLUS Loan (Federal Parent Loan for
Undergraduate Students enrolled at least half time.)
is available for parents or legal guardians (who do not have an adverse credit history)
borrowing to finance undergraduate
education.
- Independent students and post-graduate students are not eligible for PLUS loans.
- To be eligible to receive a PLUS Loan, your parents generally will be required to pass a credit
check or someone, such as a relative or friend who is able to pass the credit check, agrees to endorse the loan and promises to repay it if your parents should fail to do
so or they can demonstrate that extenuating circumstances exist.
- PLUS Loans are available through both the Direct Loan and
FFEL programs. Most of the benefits to parent borrowers are identical in the two programs.
- For a Direct PLUS Loan, the
U.S. Department of Education will send the loan funds to your school. For a FFEL PLUS Loan, the loan funds will be sent to your school by the lender.
- The yearly limit on a PLUS Loan is equal to your cost of attendance minus any other financial aid you receive.
- The interest rate for Federal PLUS Loans is an annual variable rate set by Congress.
By law, it will never exceed 9 percent (capped at
9%). The interest rate is adjusted each year on July 1.
- Your parents will be notified of interest rate changes throughout the life of their loan. Interest is charged on the loan from the date that the first
disbursement is made until the loan is paid in full.
- In most cases, the loan will be disbursed in at least two installments, and no installment will be greater than half the loan amount.
- Your parents will pay a fee of up to 4 percent of the loan. This fee is deducted proportionately each time a loan disbursement is made.
- For a FFEL PLUS Loan, a portion of this fee goes to the federal government and a portion goes to the guaranty agency to help reduce the cost of the loans. For a Direct PLUS Loan, the entire fee goes to the government to help reduce the cost of the loans.
- If your parents don't make their loan payments when they're scheduled, your parents may be charged collection costs and late fees.
- Repayment of PLUS loans begins 60 days after the
first or second disbursement (depending on the
lender). The standard repayment period is 10
years.
- There is no grace period for these loans.
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