FEDERAL LOANS
Federal Vs. Private Loans
Whether a loan is federal or private, you are taking money from a third party, and will be responsible for eventually paying it back, with interest -- added money on top of what you took from the third party.
However, federal loans are preferable to private loans for a number of reasons:
- Federal loans will not require payments while you are still enrolled in college, but private loans may.
- Interest rates on federal loans are both fixed (meaning they will not change) and generally lower than rates on private loans (which may be variable).
- Federal loans do not require credit checks, and usually do not require a cosigner.
- Federal loans offer repayment options, such as consolidation, postponement, and lower payments, that private loans do not Interest on federal loans may be tax deductible.
However, federal loans are preferable to private loans for a number of reasons:
- Federal loans will not require payments while you are still enrolled in college, but private loans may.
- Interest rates on federal loans are both fixed (meaning they will not change) and generally lower than rates on private loans (which may be variable).
- Federal loans do not require credit checks, and usually do not require a cosigner.
- Federal loans offer repayment options, such as consolidation, postponement, and lower payments, that private loans do not Interest on federal loans may be tax deductible.
HOW TO GET FEDERAL LOANS
1. Fill out the Free Application for Federal Student Aid (FAFSA).
2. This will calculate your Expected Family Contribution (EFC).
3. The School you attend will subtract your EFC from the total cost of attendance, creating your Demonstrated Financial Need.
4. Depending on your college's policy, it will meet up to 100% of your Demonstrated Financial Need in a financial award package.
5. This package may include any combination federal loans, grants, and work-study.
6. The school will give you instructions on how to accept your financial award package.
2. This will calculate your Expected Family Contribution (EFC).
3. The School you attend will subtract your EFC from the total cost of attendance, creating your Demonstrated Financial Need.
4. Depending on your college's policy, it will meet up to 100% of your Demonstrated Financial Need in a financial award package.
5. This package may include any combination federal loans, grants, and work-study.
6. The school will give you instructions on how to accept your financial award package.
SPECIFIC TYPES OF FEDERAL LOANS:
- Available to students with demonstrated financial need.
- U.S. Department of Education is the lender.
- The U.S. Department of Education pays interest during enrollment, and for six month after enrollment (grace period).
- School determines how much you may borrow, but must be less than demonstrated financial need.
- U.S. Department of Education is the lender.
- The U.S. Department of Education pays interest during enrollment, and for six month after enrollment (grace period).
- School determines how much you may borrow, but must be less than demonstrated financial need.
- Demonstrated financial need is not necessary to qualify for the loan.
- U.S. Department of Education is the lender.
- The borrower is responsible for paying interest from the start of the loan until the debt is paid.
- School determines how much you may borrow, based on cost of attendance and other financial aid.
- U.S. Department of Education is the lender.
- The borrower is responsible for paying interest from the start of the loan until the debt is paid.
- School determines how much you may borrow, based on cost of attendance and other financial aid.
- Demonstrated financial need is not necessary to qualify for the loan.
- U.S. Department of Education is the lender.
- These are loans for parents of dependent undergraduate students to assist in paying for education.
- Maximum amount lent is cost of attendance minus other financial aid.
- U.S. Department of Education is the lender.
- These are loans for parents of dependent undergraduate students to assist in paying for education.
- Maximum amount lent is cost of attendance minus other financial aid.