Navigating the world of student loans isn’t easy. Luckily, with a little bit of research and patience on your part, there are ways to make the process easier. Below, we’ve posted the answers to some of the more common questions borrowers may have regarding federal Stafford and PLUS Loans. Considering the recent changes to student loans and who may provide them, even those who believe they’re fairly knowledgeable about federal student loans may benefit from the information.
There are several ways to repay your loan. Your choices are:
Your parents can repay a PLUS Loan using either of the first two plans. Under the Direct Loan Program, you or your parents can also choose a plan with a minimum monthly payment amount of $50 and a repayment period of more than 10 years.
Under certain circumstances, you can receive a deferment or forbearance on your loan. During a deferment, no payments are required. If you have a subsidized loan, the federal government will pay the interest that accrues during the deferment. If your loan is unsubsidized, you'll be responsible for the interest on the loan during the deferment. Your parents will be responsible for the interest on their PLUS Loan during a deferment. No borrower can receive a deferment if his or her loan is in default (that is, if he or she doesn't repay the loan according to its terms).
During forbearance, payments are postponed or reduced. The government does not pay the interest; you are responsible for paying it on your student loan, and your parents are responsible for paying it on their PLUS Loan. Neither deferment nor forbearance periods count as part of the repayment period.
For more details on deferments and forbearance, see The Student Guide from the Federal Student Aid Information Center, which also explains loan programs and the loan application process in greater detail. You can access the guide online at:
http://studentaid.ed.gov/students/publications/student_guide/index.html
You can also get a paper copy of The Student Guide. Check with your college or career school or call the Federal Student Aid Information Center:
1-800-4-FED-AID or 1-800-433-3243
A FFEL or Direct Loan (including a PLUS Loan) can be canceled under the following conditions:
In addition, if a school does not make a required return of loan funds to the lender, a portion of the Direct Loan — up to the amount the school was required to return — may be canceled.
Even if you don't complete the program of study at the school, don't like the school or the program of study, or don't obtain employment after completing the program of study, these loans must be repaid. No cancellation is available for these reasons.
Repayment assistance (not a cancellation, but another way to repay) may be available if you serve in the military. For more information, contact your recruiting officer.
Before you or your parents borrow, make sure you understand all of the terms of the loan. The following questions and answers will give you a basic understanding of federal student loans
You or your parents will pay a fee of up to 4% deducted proportionately from each disbursement of a loan. A portion of this fee goes to the federal government to help reduce the cost of the loans. Also, if you or your parents don't make loan payments when they're scheduled, you might be charged late fees and collection costs.
ADVERTISEMENT |
|
Latest College & Financial Aid NewsWhich Student Loan Is Best for Me?June 13, 2022 The new semester is just around the corner, which means it is time to start thinking about how you are going to afford the new school session. Student loans can be taken out any time of the year and are useful for paying for textbooks, special classes or summer terms and additional living expenses. Choosing the right student loan can help you reach your education and career goals while still keeping your finances balanced. Here’s what to look for before you take out a student loan this summer. [...] Asian Pacific American Heritage Month 2022 ScholarshipsMay 25, 2022 As we celebrate Asian Pacific American Heritage Month, we reflect on the enormous contributions of Asian Americans and share their culturally rich history. Asian Americans and Pacific Islanders make up the fastest-growing racial group in the United States, with more than 23 million it total. However, API individuals, communities, and businesses have been disproportionately impacted by discrimination and criminal acts that have only been exacerbated by the pandemic in recent years. Now more than ever, we need to stand united as Americans against anti-Asian racism. [...] Travis Scott's Foundation Awards 100 HBCU Student ScholarshipsMay 20, 2022 Now in its second year, Travis Scott’s Cactus Jack Foundation awarded $1 million dollars to 100 high-achieving Black high school seniors with financial need. This scholarship, known as the Waymon Webster Scholarship Fund, was named after Scott’s grandfather who was a Dean of the Prairie View A&M, as well as an alumnus. Each recipient won $10,000 that will be applied to their college educational expenses. These students have maintained a 3.5 or higher GPA throughout their high school career and will attend a Historically Black College or University (HBCU) in the fall. This year, all 38 HBCUs across the nation were represented among the recipients. [...] |