Should I Apply for Federal Student Loans?

Answer 1

Every year, many college students borrow money to pay for their college education. If you are currently in college (or plan to attend college in the future) and need financial assistance, you may qualify for federal student loans. Federal student loans are guaranteed by the U.S. Department of Education, and students borrow money directly through loan programs supported by the federal government. If you are interested in applying for federal student loans, there are a few things that you should know about the process. Read on to learn more about federal student loans to determine if this financial option is right for you.

What are the benefits of federal student loans?

There are several benefits of federal student loans. First of all, many students apply for student loans so they do not have to work while they are in school. If you do not have to work, then you can spend more time focusing on school and studying for your classes. Secondly, lenders usually offer flexible repayment options for student borrowers. In addition, if you receive federal student loans, you are not required to make payments until after the grace period has ended. Generally speaking, students are not required to make payments on their loans until six months after graduation; or six months after a student withdraws from school. In addition, students are not required to make any payments as long as they are enrolled at least half time in an eligible program. Lastly, you do not need good credit to apply for federal student loans (since federal student loans are based on a students financial need and not on their credit history).

What are the disadvantages of federal student loans?

Student loans are not free money (unlike grants and scholarships), so if you borrow money you must repay it. Unfortunately, this may create problems for a student in the future (especially if he or she accumulated an excessive amount of debt while in college). In addition, if you fail to repay your student loans in a timely manner, the lender can sue you, receive a judgment from the court, and garnish your wages. The government can also garnish your income tax refund to repay your student loan debt. Unfortunately, late payments, student loan defaults, and judgments can damage your credit history and make it difficult for you to obtain credit in the future.

Is there a limit on the amount that I can borrow?

Yes, there is a maximum amount of money that a student can borrow while in college. Federal student loan limits are based on your grade level in college (freshman, sophomore, junior, etc.), along with your income and financial status. Please note that students are not allowed to borrow more money than their cost of attendance for that academic year. In addition, your school will subtract any other type of financial aid that you receive from your cost of attendance, too. Therefore, this will decrease the amount of federal student loans that you can borrow for each academic year.

How do I apply for student loans?

If you are interested in applying for federal student loans, the first step in the process is to meet with a financial aid counselor at your school. The counselor can discuss your options with you and answer any questions that you may have about the application process. You must also complete the FAFSA (Free Application for Federal Student Aid) as part of the application process. The FAFSA will help your school determine how much money you can receive in financial aid. Simply go to www.fafsa.ed.gov to complete the FAFSA online.

Whether or not you apply for federal students is totally up to you. As you can see, there are pros and cons that accompany student loans. So, it is best to evaluate your financial situation and weigh out all your options before you make a decision. If you choose to utilize student loans, be sure to borrow wisely and live within your means.