Federal Student Loans Explained
Federal student loans are loans issued by the government for both undergraduates and post-graduates for the purposes of furthering their education. The loan may cover tuition expenses as well as other costs such as books. The loans are directly from the Department of Education and are made available to students at a heavily subsidized interest rate.
Federal Student Aid Programs are the basic support systems of university financial assistance. Every year millions of dollars are provided to students via a variety of outlets such as grants, scholarships, and work or standalone loans.
These central loans may be based on a means test, though not all are. Subsidized loans accrue interest as soon as you leave school or if your attendance falls, while unsubsidized loans gather interest once you graduate.
The ‘Federal Student Aid’ program is constituted from he following categories:
• Pell Stafford loans, which are available via the Direct Loan Program
• Federal Family Education Loan
• The Program PLUS loan for parents and/or students in employment
• Consolidation loans
• Federal Work Study
• Perkins loans
• Federal Supplemental Educational Opportunity Grants
Your eligibility for a federal student loan is based on your financial need as well as several other factors. The financial aid administration office at your college will make a decision about your eligibility.
To receive aid from these programs…
• You must demonstrate financial need
• You need to have a high school diploma or General Education Development certificate. You may be required to pass a test instigated by the U.S. Department of Education.
• You may be required to meet other standards which your state requires and which the Department of Education approves.
• You should have completed high school education by home schooling that’s approved by the Government
• You should be studying for a degree or certificate in a recognized study program.
• You should normally be a U.S. citizen.
• You need a valid Social Security Number
• You can register with the ‘Selective Service’ if you are required to.
• Maintain a decent academic record once you are in school.
• Demonstrate that you are not in default - on a federal student loan or other loan - and do not have a federal student grant.
• Confirm that you will use federal student aid for educational purposes only.
The Federal Student Loan program offers some great benefits.
• Most of the programs do not require a credit check.
• Credit checks are a required for a PLUS Loan as this loan is given to the parent and is dependent on the parent’s credit history.
• Federal Student Loans give low, fixed interest rates.
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