Students who look for financial aid during studies either go for federal student loans or private student loans. Federal student loans are offered by the US government, which can be availed directly through banks, student loan lenders, school, or from Federal Family Education Loan program otherwise known as FFELP. Federal loans are offered with very low interest rates, longer repayment periods, and various kinds of repayment options with easy credit requirements than the private loans. In case of federal subsidized student loan, the interest is paid by the government to the financial institution when the student has been studying and also during the grace period. A federal loan may not be enough to cover all the expenses of the student and in that case, the student might have to take a private student loan to supplement his needs. It has to be remembered that, certain fees are deducted from the federal student loan amount, which means the student will not get the full loan amount applied for and should only take the actual amount into account while preparing the budget.
There are different kinds of federal direct student loans from different institutions. Hence, it is advised to take the guidance of the parents or from other financial aiding sources to decide on the type of federal direct student loan to suit the student the best.
Perkins loan option:
This loan can be availed by needy undergraduates and graduates, which is availed by them at a fixed lower interest rate of five percent. The funds are dispersed by the school, making it very easier to get the amount as soon as the student gets enrolled, rather than waiting half time to be eligible in the case of other federal loans.
Stafford loan option:
It is the most common federal student loan, which can be applied for by anyone. They offer fixed interest rates and are in the form of subsidized federal student loans and unsubsidized federal student loans. When the student avails the subsidized federal student loan, the government pays the interest when the student is studying, but in the case of unsubsidized federal student loan, the student has to the pay the interest but can defer making any such payments until he completes his graduation.
PLUS loan option:
It is otherwise known as the parent loan for undergraduate students. It is given to the parents of undergraduate students who are dependent and have enrolled at least half time. This loan option requires the applicant to be free from any adverse credit experiences like the bankruptcy, default etc on their credit record. These loans are offered at a fixed interest rate that is higher than the Stafford loan rate and also the repayment starts when the student is studying in the school.
To get a federal student loan, the student should complete the FAFSA (free application for federal student aid) and submit the same.
Tips to make the process easier:
Before filling up the FAFSA form, the student has to be very organized and should have gathered all the necessary information to fill the form. It is very important to apply much earlier than the closing date for the application, to avoid any last minute trouble or avalanche. While filling up the form, one needs to be very patient and should allocate enough time. It takes an hour to complete the application normally.
About the Author:N. Sai is an expert in dealing with finance related matters. He has written several informative articles on topics like student loan, pay day loan, credit card, debt consolidation, building a good credit score, mortgage, home refinancing, loan and insurance. He regularly contributes articles to web guides on student loan and payday loan http://www.onlineloanhelp.info and http://www.getmoneytoday.info
Related Articles
Key Benefits of Private Student Loans
By: N. Sai | 30/09/2007 | Loans
Private student loans can be obtained at a faster pace, making it easy to get and with great flexibility. Read on to know how private student loans help students further their academic activities at ease.
An Introduction to Student Loans
By: N. Sai | 30/09/2007 | Loans
Student loans are meant to help students who are unable to bear their educational expenses. Find out from here how students can benefit from a timely student loan to support their academic activities.
Ideal Student Loan Consolidation Programs
By: N. Sai | 30/09/2007 | Loans
An ideal student loan consolidation program will enable students to pay lesser amount towards interests and also put an end to different kinds of student loans. Read to learn about finding an ideal student consolidation program for you.
Federal Student Loan or Personal Student Loan: What Will Suit you the Best
By: N. Sai | 30/09/2007 | Loans
There are several types of students designed for specific needs of students. This article discusses how one can choose a student loan that suits his or her academic requirements.
Are Student Loans Better Than Credit Cards?
By: Vanessa Mchooley | 04/01/2006 | Finance
Instead of applying for an adequate student loan, too many students get caught up in the idea that they are solving their problems with credit cards, when instead they are creating a financial nightmare for themselves.
Students Consider the Cost With the Federal Family Education Loan Program
By: Jeff Mictabor | 05/03/2007 | Education
The College Student Relief Act (H.R. 5), recently approved in the U.S. House of Representatives, currently is awaiting approval by the Senate. The act, which proponents claim will benefit taxpayers, may not have the impact that backers claim. Essentially, H.R. 5 encourages schools via incentives to go with the government’s Direct Lending Program over the Federal Family Education Loan Program (FFELP).
Repayment of Student Loans Need not be an Overwhelming Prospect
By: Jeff Mictabor | 09/07/2007 | College and University
Chances are, all the college graduation parties are long gone and the celebration of recent graduates’ noteworthy achievements is yesterday’s news. Along with the receipt of the college degree come bigger responsibilities, like getting a job, finding a source of ongoing monthly income, maturing into a responsible adult, and meeting financial obligations. In the midst of transitioning from the campus lifestyle of a college student to that of a working individual comes the repayment of college stu
With College Come Financial Responsibilities
By: Jeff Mictabor | 05/10/2007 | College and University
Between homework, tests, class schedules, a part-time job, and the pressure to maintain acceptable grades, college thrusts students into a world of increased responsibilities. And financial responsibility, the one that could most affect you in the long run, often gets lost in the crazy shuffle of your college life.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
Can someone staying outside uk apply for private ...
By: talk2dekky | 12-10-2007
can someone staying outside uk apply for private loans to study in any country.
Q&A Powered by:
Latest Loans Articles
Avail Personal Loans to Fulfil Your Wishes
By: Gracy Bonsu | 21/08/2008
Personal loans are the most genuine and most transparent kind of loans that exist in every loan market around the world. Even for people suffering from the bad credit score, there is bad credit personal loans.
Need of an Extensive Research to Find Low Rates Loans
By: Gracy Bonsu | 21/08/2008
Looking for a cheaper personal loan can be quite confusing and time-consuming. For this purpose, there are numerous lending authorities in the UK offering efficient and inexpensive personal loans. Inexpensive personal loans can be looked online by every borrower in the UK.
Get Secured Loans and Enjoy the Life Fully
By: Gracy Bonsu | 21/08/2008
Secured loans are the best option for a person, when he comes across any kind of financial shortcoming. But despite facing the problem of credit crunch, there are still many lenders across the whole United Kingdom who are willing to offer cheap secured loans at a very reasonable rate of interest.
Online Finance Company!
By: Sadhana Dhanyal | 21/08/2008
It is not easy to get a loan approved in a short period of time. Generally, lenders take a considerable amount of time to approve a loan. They take into consideration the credit score of the borrower, his repaying capacity, financial situation among other things while approving a loan.
Instant Loans Company!
By: Sadhana Dhanyal | 21/08/2008
Are you finding it difficult to secure a loan urgently? Don’t know where to look for help? Don’t worry. Find a simple solution in the form of instant loans no faxing. These loans are meant for the short term needs. They are very easy to avail. The process of loan application is very simple.
Payday Loans: Easy and Fast Approved Loans for Immediate Needs
By: Scarlette Riley | 21/08/2008
Payday loans are fast and easy loans. The loan amount is £100-£1500 for the loan term of 2-4 weeks. The interest rate is high and these loans are given to the borrowers who are employed with stable salary and are the legal citizens. Both online and traditional lenders offer these loans.
Loans for Ccjs: a Pristine Financial Support in Tough Times
By: Andrea Fletcher | 21/08/2008
If you're a borrower and in deep debts with a CCJ and you want to consolidate the loans the Loans for CCJs is the answer, because there are many lenders who are sympathetic to the people with bad credit.
Now Meet All Your Financial Needs With Loans Against Property
By: Addi | 21/08/2008
Loans against property are the best ways to avail loans for any person whatsoever. Since these loans are of both secured as well as unsecured nature therefore it totally depends upon the discretion of the loan applicant on which kind of loan he wants to avail.
More from N. Sai
Federal Student Loan or Personal Student Loan: What Will Suit you the Best
By: N. Sai | 30/09/2007 | Loans
There are several types of students designed for specific needs of students. This article discusses how one can choose a student loan that suits his or her academic requirements.
Ideal Student Loan Consolidation Programs
By: N. Sai | 30/09/2007 | Loans
An ideal student loan consolidation program will enable students to pay lesser amount towards interests and also put an end to different kinds of student loans. Read to learn about finding an ideal student consolidation program for you.
An Introduction to Student Loans
By: N. Sai | 30/09/2007 | Loans
Student loans are meant to help students who are unable to bear their educational expenses. Find out from here how students can benefit from a timely student loan to support their academic activities.
Key Benefits of Private Student Loans
By: N. Sai | 30/09/2007 | Loans
Private student loans can be obtained at a faster pace, making it easy to get and with great flexibility. Read on to know how private student loans help students further their academic activities at ease.
Used Cars: Advantages and Disadvantages
By: N. Sai | 30/09/2007 | Classics
There are both advantages and disadvantages involved in buying used cars. This article deals in detail the pros and cons of buying a used car.
Finding the Right Sources for Used Cars
By: N. Sai | 30/09/2007 | Classics
There are several excellent sources for buying used cars. Some of the best and sought after sources are the newspaper classifieds, car auctions, and car buying guides and used car dealers. This article lists out a few important sources where we can search for availability of used cars.
New Vs. Used Cars: What Suits you the Best
By: N. Sai | 30/09/2007 | Classics
Both the new and used cars have their own advantages and disadvantages. This article lists out certain points that you can use to decide about what type of car suits you the best.
Key Points to be Considered While Buying Cheap Used Cars
By: N. Sai | 30/09/2007 | Classics
Everyone would like to get a cheap used car at a good condition, but before doing so there are many things to consider. This article discusses certain factors that have to be taken into consideration while buying a cheap used car.
Finance 
