What Are The Most Used Federal Student Loan Programs

Borrowing from the federal government is one of the safest and most reliable ways to finance higher education. Besides having low fixed interest rates, they also give you various repayment choices.

You can switch repayment methods as needed, as well as many options for temporarily suspending payments through deferral or forbearance and the possibility to select income-driven repayment plans that restrict what you pay as a proportion of income after you graduate.

Finding the correct federal student loan program might be difficult if you don't know what they are. This article will introduce you to the most common federal student loan programs so you can make an informed decision.

Various Federally-funded Student Loans

You can choose from the following federal loan programs:

• This includes both subsidized and unsubsidized direct loans.
• Plus loans for parents or students
• Unsubsidized and Subsidized Direct Loans

Stafford loans are another name for direct loans, both subsidized and unsubsidized. The cheapest kind of government help is the direct subsidized loan. Only undergraduates who prove financial need are eligible for these loans, and the schools set the maximum yearly and lifetime loan amounts.

The Direct PLUS Loan Program

Undergraduate parents and graduate students are the only two groups eligible for Direct PLUS loans. Although a low credit score is not a deal breaker for direct subsidized loans, a poor credit history will prevent you from being approved for a PLUS loan under U.S. Department of Education guidelines. Direct PLUS loans have a fixed interest rate of 5.30 percent through July 1, 2021. It's important to note that the PLUS loan's interest rate and costs are time-sensitive.

How To Apply For A Federal Student Loan

You can get a federal student loan by filling out a FAFSA for each year that you need money. Fundamental financial data, including individual and family income and facts about personal and family assets, can be submitted online for this purpose. All parents with dependent students must complete the Free Application for Federal Student Aid (FAFSA) annually.

Critiques of The Top Private Student Loans

College Ave

Private loans are available via College Ave Student Loans for domestic and international students. Borrowers must be enrolled at an approved school, not necessarily full or part-time. College Ave pays for all a student's tuition and fees by issuing a single loan to the school. To help with things like books and gas money, parents can get up to $2,500 per student.

Sallie Mae

Non-degree-seeking students at the graduate, undergraduate, and professional levels are all eligible for Sallie Mae loans. For graduate students, Sallie Mae offers unlimited coverage for all approved expenditures. The Smart Option Student Loan for Career Training for an entire academic year covers equipment, materials, and tool costs.

The online application takes around 10 minutes to complete, and the money will be sent to your school within 10 business days. Smart Option Student Loans have variable interest rates beginning at 2.62% and fixed interest rates beginning at 3.75%, with the autopay discount applied to both.

Citizens Bank

Loans for education and home improvement are available from Citizens Bank. Citizens offer parent loans with variable APRs as low as 2.36% and fixed APRs as low as 3.71%. In addition to the 0.25% discount for setting up automatic payments, Citizens provides a 0.25% discount for loyal clients.

A 0.25% rate reduction is available to new customers who sign up for automatic payments. There is no prequalification process available at Citizens Bank. While applying for a student loan online, students and their parents may use the site's student loan calculator to see their monthly payments.

Credible

Credible is a no-cost online marketplace that works with companies including Ascent, Citizens Bank, Discover, College Avenue, EdvestinU, MEFA, and Sallie Mae to help students get the best possible terms on private student loans.

Prequalification requires a mild credit check, allowing students and cosigners to quickly and efficiently evaluate loan offers from many lenders. If a borrower doesn't find a better rate elsewhere, Credible will fork up $200 on a gift card, per the Better Rate promise.

Borrowing amounts up to the total price of attendance are typically available from lenders, with payback terms ranging from five to twenty years. Because of the competitive nature of the marketplace model on which Credible is built, individual lenders set their requirements in terms of minimum loan amounts, credit scores, and terms of approval.