A Federal Student Loan Provides Funding For College
When many students go to school they do not have the money to pay for their higher education, resulting in the need for loans and grants to pay the tuition, living expenses and associated costs. Many take out a federal student loan or two, or three in order to make ends meet while they also pay for their education.
Federal student loans are good for students because the interest rates that they are charged tend to be quite low. This is because the fixed interest rate is established by the government, who also guarantees the loan, despite the fact that private lenders tend to care for the details of taking out the loan.
Many students who would not be able to get a loan from most traditional lending agencies are able to do so by means of a federal student loan, which makes them quite attractive, as do the government's guarantee and low interest rate.
A grace period of six months is often given to individuals right after they graduate from college during which they do not have to make any payments on their student loans. The government actually pays the interest on subsidized loans during this time period.
Any money the student pays on the loan during the deferment period will be applied to the principal reducing the overall amount due on the loan. At the end of the deferment period, the student will be responsible to make the full payment, including interest on the federal student loan. For non-subsidized loans, interest will begin to accrue immediately upon graduation, added to the total amount of the federal student loan.
Federal Student Loans: Portions Can Be Forgiven
The government is all about helping recent college grads with their federal student loan and there are numerous ways in which a portion of the loans can be forgiven. By volunteering with some organization such as the Peace Corps or VISTA can erase part of the loan balance for every year the graduate volunteers with any of the agencies.
There are also some programs aimed at new teachers that teach in certain locations where a portion of the federal student loan is forgiven based on the time they serve in those schools. For most, a five year stint at one of the schools can erase about 85 percent of the federal student loan debt.
Federal student loans are good for students because the interest rates that they are charged tend to be quite low. This is because the fixed interest rate is established by the government, who also guarantees the loan, despite the fact that private lenders tend to care for the details of taking out the loan.
Many students who would not be able to get a loan from most traditional lending agencies are able to do so by means of a federal student loan, which makes them quite attractive, as do the government's guarantee and low interest rate.
A grace period of six months is often given to individuals right after they graduate from college during which they do not have to make any payments on their student loans. The government actually pays the interest on subsidized loans during this time period.
Any money the student pays on the loan during the deferment period will be applied to the principal reducing the overall amount due on the loan. At the end of the deferment period, the student will be responsible to make the full payment, including interest on the federal student loan. For non-subsidized loans, interest will begin to accrue immediately upon graduation, added to the total amount of the federal student loan.
Federal Student Loans: Portions Can Be Forgiven
The government is all about helping recent college grads with their federal student loan and there are numerous ways in which a portion of the loans can be forgiven. By volunteering with some organization such as the Peace Corps or VISTA can erase part of the loan balance for every year the graduate volunteers with any of the agencies.
There are also some programs aimed at new teachers that teach in certain locations where a portion of the federal student loan is forgiven based on the time they serve in those schools. For most, a five year stint at one of the schools can erase about 85 percent of the federal student loan debt.
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