Your eligibility for federal student loans is determined by the results of your Free Application for Federal Student Aid, or FAFSA. Federal loans include subsidized and unsubsidized federal student loans. Take advantage of federal loans if you are eligible because federal loans have lower interest rates than private loans and conditions are more flexible.
Private student loans are also called alternative loans, because they are an alternative to federal loans. While federal loans have more flexibility and lower interest rates, there are tight borrowing caps. Private lenders have more borrowing options for students who still need money. There are a lot of lenders, each with different rules, rates, fees, and benefits. Do your research to find the best lender. Contact your college’s financial aid office for a list of top lenders.
Private loan rates fluctuate with the economy and vary from lender to lender. Each student lender sets their own interest rates and chooses their own benefits. Private lenders offer more money than federal loans. Most private loans calculate their number similar to federal loans where the borrowing limit equals the cost of attendance minus other financial aid. Private lenders, however, usually require students to start paying immediately after the first disbursement.
The main source for private loans are banks. Be aware that fluctuations in the banking industry affect private loan sources. Credit unions are also vulnerable to market. Investigate your private student loan options closely to make sure you are getting the best rate possible. Remember to always read the fine print.
Consolidating loans can simplify your student loan repayment process because they combine several payments into one. Interest rates on consolidated loans are often lower than loans that are not consolidated. Federal loans can be consolidated during repayment, grace periods, deferment, and forbearance. Loans cannot be consolidated while the borrower is still in school. The consolidation rate is fixed for the life of the loan, which protects the borrower from possible rate increases but does not allow them to benefit from possible decreases. There are no application fees or prepayment penalties. Still investigate your options carefully to not lose out on borrower benefits.
Latest College & Financial Aid News
July 9, 2019
Lawmakers are considering extending Pell Grants to people who pursue short-term training in order to land better jobs, faster. Federal student aid in the form of Pell Grants can currently be used for college degrees and qualifying certificate programs. [...]
July 2, 2019
Three San Bernardino County women who have been accused of stealing $1 million in federal financial aid from Fullerton college, in California, have been arrested by the U.S. Justice Department and are charged with various counts of mail and wire fraud. The scheme involved enrolling hundreds of mainly non-existent students, successfully applying for grants and loans and pocketing the money. [...]
June 27, 2019
Nothing says 'Merica like these Patriotic Scholarships as we approach Independence Day and remember how, in America, education is a great equalizer. Whether you are an American citizen searching for college scholarships or are studying abroad in the USA, these American-themed scholarships are for those who truly believe in the American dream. In the land of the free, we have plenty of free college scholarships to help you achieve your higher education dreams. [...]