What are the Student Loans Available in US? Apply for Federal Student Loans in USA.

What are the Student Loans Available in US? Apply for Federal Student Loans in USA.

Do you want to pusue the education in USA, Here are the loans scheme available for the students by the Federal Governement. Here I have summed up all things you need to know about the Federal Student Loans.

 

What is Loans?

Loans are the financial Aid received from the Financial Institution for subject to the terms and condition with the specific objective. As compared to other financial aid such as grants, Scholarship, Gifts, Donation which does not required to be repaid except in the rare condition, Loans are required to be repaid. Repayment of the loans includes the two portion of the amount. Principal amount and the Interest amount.

Principal Amount

Principal amount is the amount that is actually borrowed by the Borrower (Loan Receiver).

Interest Amount

In general loans are given with the motive of the gaining interest. Interest is that portion of the amount which is paid by the borrower to the lender in excess of the Principal Amount.

What is Student Loans?

Student loans are a form of financial aid used to help more students access higher education. Student loan debt has been growing rapidly since this decade. As specified in the wikipedia student loans in USA (United State of the America) is rised to nearly $1.4 trillion by late 2016.  Approximately 43 million have student loans, with an average balance of $30,000. These loans have to be repaid apart the scholarship and grants does not required to be repaid. Nowadays all students want to get the better education and not every student can earn the money, that can cover the educational fees so it is necesary to get the loans to cover the educational fees. 

The thing you need to Know about, Difference between the federal student loans and the private student Loans.

 Federal student loans allow students and their parents to borrow money to pay for a college or career school education. A federal student loan is made through a loan program administered by the federal government whereas A private student loan is a nonfederal loan made by a private lender, such as a bank or credit union. The terms and conditions of private student loans are set by the lender, not the federal government. If you’re not sure whether you’re being offered a private loan or a federal loan, check with the financial aid office at your school. 

What are the requirements/eligibility criterai to get the Federal Loan in US? Am i qualified?

Do you want to pursue the better career and want to fund for the better education, and you are confused whether you are qualified or not for the federal aid. Below are the requirements to be eligible for the federal Aid:

Basic Requirements for the Federal Student Aid

You must fulfill all of the below criteria

  • You must be qualified to get the college or career school education
  • You must be accepted for the enrollment as the regular student
  • Be registered with the selective service, if you are male (must register between the age of 18 and 25)
  • You must have the valid Social Security Number (Except you are from Marshall Islands, Federation of State of Micronesia, or the Republic of Panau)
  • Sign and Certify on FAFSA stating:
    • You are not default on a federal student loan and do not owe the refund on a federal grant
    • You will use the federal aid only for the educational purposes
  • Maintain Statisfactory Academic progress 

You must fulfill any of the below criteria

  • You must be the US citizen or US National
  • You must be the US Permanent Resident holding the Green Card
  • Must have an arrival and departure record
  • Have battered Immigrant Status
  • Have a T-VISA

Other Requirements

Students With a Parent Who Was Killed in Iraq or Afghanistan

If your parent died as a result of military service in Iraq or Afghanistan after the events of 9/11, you might be eligible for additional Federal Pell Grant funding or for an Iraq and Afghanistan Service Grant.

Non-U.S. Citizens

If you are Non- U.S. Citizens you must have the green card to get the federal Aid.

Students With Criminal Convictions

If you are incarcerated, have a conviction for a drug offense, or are subject to an involuntary civil commitment after completing a period of incarceration for a sexual offense, your eligibility for federal student aid may be limited.

Students With Intellectual Disabilities

Students with intellectual disabilities may receive funding from the Pell Grant, Federal Supplemental Educational Opportunity Grant, and Federal Work-Study programs in certain circumstances.

Staying Eligible

Once you’re in college or career school, make sure you stay eligible for federal student aid by paying attention to a few things, including keeping on track toward graduation. And remember to fill out your Free Application for Federal Student Aid (FAFSA®) every year. 

 

What are the types of the Federal Student Loans Available? 

 William D. Ford Federal Direct Loan (Direct Loan) Program

The William D. Ford Federal Direct Loan (Direct Loan) Program is the largest federal student loan program. Under this program, the U.S. Department of Education is your lender.

 Federal Perkins Loan Program

The Federal Perkins Loan Program is a school-based loan program for undergraduates and graduate students with exceptional financial need.

 

How Much money I can and I shall borrow as the Federal Student Loans?

You can determine whether you need a loan and how much you need to borrow by adding up the total cost of your education (tuition, fees, room and board, etc.) and subtracting the amount of scholarships, grants, and savings you have to contribute to those costs. You should borrow only what you need and consider the earnings potential in your chosen profession to determine how easily you'll be able to repay your debt. You can find salary estimates for a variety of occupations in the U.S. Department of Labor’s Occupational Outlook Handbook at www.bls.gov/ooh. Your student loan payments should be only a small percentage of your salary after you graduate. 

How money I have to Repay for the Federal Student Loans?

The repayment of the loans is the principal amount you have borrowed and the minimal interest amount.

Below are the interest rate charged and the details of the loan

Direct Subsidized Loans    *

  • For undergraduate students who have financial need
  • For loans first disbursed on or after July 1, 2016, and before July 1, 2017, interest rate is 3.76%
  • You’re not usually charged interest on the loan during certain periods
  • The U.S. Department of Education (ED) is the lender; payment is owed to ED 
  • Maximum Amount of the Loan Per Year is $5,500 (depending on the level and dependency status)

Direct Unsubsidized Loan 

  • For undergraduate, graduate, and professional degree students; financial need is not required
  •  For loans first disbursed on or after July 1, 2016, and before July 1, 2017:
    • 3.76% interest rate for loans made to undergraduate students, and
    • 5.31% interest rate for loans made to graduate and professional degree students
  • You’re responsible for interest during all periods
  • ED is the lender; payment is owed to ED
  • Maximum annual reward $20,500 (less any subsidized amounts received for same period) ( depending on grade level and dependency status)

Direct PLUS Loan 

  • For parents of dependent undergraduate students who are borrowing money to pay for their child’s education, and for graduate or professional degree students; financial need is not required
  • For loans first disbursed on or after July 1, 2016, and before July 1, 2017, interest rate is 6.31%
  • Borrower must not have negative credit history
  • ED is the lender; payment is owed to ED 
  • Maximum amount is cost of attendance minus any other financial aid student receives 

Federal Perkins Loan

  • For undergraduate, graduate, and professional degree students
  • Eligibility depends on your financial need and availability of funds at your school; contact your school’s financial aid office about eligibility
  • Interest rate is 5%
  • Your school is the lender; payment is owed to the school that made the loan ​
  • Maximum Loan Amount is for
    • Undergraduate students: $5,500;
    • graduate and professional degree students: $8,000 Total lifetime limit may not exceed $27,500
    • for undergraduates and $60,000 for graduate students (including amounts borrowed as an undergraduate)

 

How to apply for the Federal Student Loans in USA?

Following are the general steps you have to follow to get the Federal Student Loan

  • The first step in getting student aid is completing the Free Application for Federal Student Aid (FAFSA®) at www.FAFSA.gov. You must do this every year
  • Complete Entrance Counseling
  • Complete Loan Agreement for a Subsidized/Unsubsidized Loan (MPN)
  • Complete Financial Awareness Counseling
  • Complete Exit Counseling
  • Use the Repayment Estimator
  • Complete TEACH Grant Counseling
  • Complete TEACH Grant Agreement to Serve

Subject to the type of the Loan you might have to fulfil additional process to get the loans.

 

Disclaimer: 

The information in this page is true at the time of publication. Any decision taken by the information in this page shall not be our responsibility. We kindly request you to make inquiry to your college and school ann other official sources.


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