When a child reaches the higher education, the additional expenses turn out to be an additional burden to both students and parents. There is no other way to facilitate the educational needs of the student but to apply for student debt. However, not everyone has familiarized the terms with all the loan preferences accessible to help them pay for college. So locate below which loan you think best suits to assist your desires.
The Federal loan has three (3) main types, and these are the following:
1. Federal Stafford Loans – this type of loan is synchronized by the federal government; the loan can be applied in a certain bank, credit union (a non-profit organization), or directly to the government. Stafford loan is best commendable to students who lacks of financial support for their education because the government is the one oblige to pay for the interest while the student is enrolled.
2. Federal Perkins Loans – another type of federal loans offering for the in-need student’s financial support based on eligibility, in which generally only cover very small interest rates. The interests of this loan do not increase unless the student reaches 9 months, after he/she drops under the half-time enrollment.
Note about these loans: these loans are credit bureau reported, so you have to pay on time because if you are late on payments or failure to pay, it could possibly spoil your credit.
3. Federal Plus Loans – these loans is available for parents who have undergraduate student. These allow the parents to borrow money to support their child’s education under federal loan program. The same as the fore federal loans, the interest are as well in low interest but the reimbursement usually start within 60-90 days after the student graduates or after the complete disbursement of the loan.
Therefore, it is important for students to be cautious on managing the student debt because the debt risks are there at all times. Those who are currently evaluating heavy debts have carried huge implications; many students might make it through their graduation but the thousands of dollars are weighing over them which are eventually not helping at all. According to a non-profit advocacy group in the United States, the standard debt for college students and graduates has increased up to fifty percent after inflation.
The low student loan rates and mortgage rates helped the debtors alleviate the impact of the soaring debts. If this is always the case, then students may soften their debt burdens. But, otherwise, one thing can help those students who already suffocate on their debts is the student loan consolidation. This is the most practical reimbursement tool that merges your entire loans in one master loan; thus, your monthly payment will get reduced in some cases.