Federal vs. Private Student Loans: Which Should I Choose?

 

articles on student loans

Aug 29,  · When it comes to student loans, it pays to shop around to know exactly what you’re signing up for. So, if you are looking for a student loan provider, here are 6 things you should know about Sallie Mae student loans. 1. Types of Student Loans Available. Aug 21,  · The Great Student-Loan Scam The magnitude of federal budget losses is becoming clearer. What it did show is that more Americans are defaulting on Reviews: May 27,  · Like any other type of loan, federal student loans eventually need to be repaid with interest. Federal student loans have fixed interest rates, meaning that they stay the Author: Matt Frankel, CFP.


Student Loans | Consumer Information


Paying for school can be a big undertaking. Understanding the difference between federal and private loans and your consolidation and repayment options can save you thousands of dollars. And some of the companies that promise student loan debt relief are scams. There are several types of aid available to help you pay for your education beyond high school, including grants and scholarships, federal work-study jobs and student loans.

Grants and scholarships are free money. They should be your first choice to finance your education. You are only paid for the hours that you work. Articles on student loans may need a co-signer and a credit check. The cost to repay a private student loan will depend on your credit score and other factors. You will not have to start repaying your federal student loans until you graduate, leave school, or change your enrollment status to less than half-time. Undergraduate students with financial need usually qualify for a subsidized loan, articles on student loans.

The government pays the interest while you are in school on at least a half-time basis. Private student loans are not subsidized. No one pays the interest on your loan but you. Loans can be consolidated into a Direct Consolidation Loan for free. Learn about your consolidation options. There may be options for consolidation, depending on your lender. But there usually is a fee. If you are having trouble repaying your loan, you may be able to temporarily postpone or lower your payments.

There are several repayment options, including an option to tie your monthly payment to your income. You may be eligible to have some portion of your loans forgiven if you work in public service. It is the only way to apply for federal student aid. It is free to apply. In addition, many states and colleges use your FAFSA data to determine your eligibility for state and school aid. Some private financial aid providers may use your FAFSA information to determine whether you qualify for their aid.

It is a username and password that you create, articles on student loans. Dishonest people could use your FSA ID to get into your account articles on student loans take control of articles on student loans personal information. But depending on your situation and what kind of loans you have, you might be eligible for a different repayment plan or to get your loans forgiven. These options are free. You also can find out how to get out of default.

With private student loans, you typically have fewer repayment options, especially when it comes to articles on student loans forgiveness or cancellation. To explore your options, contact your loan servicer directly. Consolidating your student loans means combining multiple loans into one loan. Typically, people consolidate their loans to simplify monthly payments or get new repayment terms. When you consolidate your loans, you get a brand new loan with new terms.

If all of your education loans have fixed interest rates, it may not matter when you consolidate. If some or all of your loans have variable interest rates, when you consolidate into a fixed loan may affect the interest rate of your loan. Consolidating federal loans with the federal government is free. Consolidating with the federal government is a process you can do on your own, at no cost. The fixed rate is the weighted average of the interest rates on the loans being consolidated.

You should make sure that it makes sense to consolidate your loans. Consolidating a low-interest Perkins loan may not be in your favor.

Perkins loan borrowers have unique deferment and cancellation rights that may be lost when consolidating. Consolidation has important pros and cons to consider, especially since once your loans are combined into a Direct Consolidation Loan, they cannot be separated, articles on student loans.

If you are having problems making your monthly payment but are concerned about the impact of loan consolidation, you might want to consider deferment or forbearance as options for short-term payment relief, or consider switching to an income-driven repayment plan.

Private loans have to be consolidated with a private lender. There might be a cost when you consolidate but avoid companies that tell you to pay upfront. Make sure you understand all the conditions of your consolidated loan before you agree to consolidate. Some debt relief companies and lenders offer to consolidate federal and private loans together into one articles on student loans loan to lower your monthly payments or interest rate. Consolidating private and federal loans turns it into a private loan, which means you will lose the federal repayment benefits and protections of your federal loans, such as deferment and forbearance, income-based repayment plans, and articles on student loans forgiveness.

Before you consolidate your loans, find out what it could mean for your specific situation, articles on student loans. If you have private loans, talk to your loan servicer. And some of the companies that promise relief are scams, articles on student loans. Never pay an up-front fee. If you pay up front to reduce or get rid of your student loan debt, you might not get any help — or your money back.

Only scammers promise fast loan forgiveness. Or they might say they will wipe out your loans by disputing them. Scammers use official-looking names, seals and logos, and tell you they have special access to certain repayment plans, new federal loan consolidations, or loan forgiveness programs.

If you have federal loans, go to the Department of Education directly at StudentAid. Take your time and check it out, articles on student loans. Dishonest people could use that information to get into your account and take control of your personal information.

Federal Trade Commission Consumer Information. Search form Search. Student Loans. Share this page Facebook Twitter Linked-In. Tagged with: collegedebt collectionloanschoolstudent. Got student loan debt? Interest Rates the cost of borrowing money.

Repayment terms. There is no fee to repay your loan more quickly — called a prepayment penalty fee. You should check with your lender to find out about your repayment options. It is unlikely that a private lender will offer a loan forgiveness program.

 

Your Guide to Federal Student Loan Interest Rates

 

articles on student loans

 

Mar 21,  · Whether you’ve got student loans or you plan on applying for them, understanding the difference in types could save you thousands. Find out whether Author: Elizabeth Aldrich. Aug 29,  · While student loans can certainly fill the funding gap and help students pay for college, they come with a host of challenges. Student loans always seem to be in the news—from massive national student loan debt to proposed programs to try and tackle the issue. In current student loan news, the government is increasing its . May 27,  · Like any other type of loan, federal student loans eventually need to be repaid with interest. Federal student loans have fixed interest rates, meaning that they stay the Author: Matt Frankel, CFP.