APPLY FOR A STUDENT LOAN: A Federal Provision For Education

2007-03-08 10:33:40

( Financial )



Those years of saving up for a college education may not have gathered enough funds and you finally find yourself getting a loan for college. That is probably the most practical thing to do as almost any regular student can apply for a student loan so long as he is registered in an eligible program for at least half time.

There are generally two types of student loans – the federal and the private student loans. Federal loans for college generally have lower interest rates so it is most advisable to apply for federal aid first before applying for private loans should your approved amount for mortgage prove to be insufficient for your need.

Federal loans can be subsidized or unsubsidized. Subsidized loans are aids given based on financial need and interests are charged only when repayment period begins which is usually deferred. In this respect, the government subsidizes the interest during the no-payment period. Repayment period for unsubsidized loans on the other hand begins the moment the full amount is released and the interest is charged all throughout the repayment period.

When you apply for a student loan, you initially need to complete and submit an application for federal student aid. The government then estimates your Expected Family Contribution or what is known as EFC. This is the determined amount by the government your family will be able to afford to spend on your college costs.

After evaluation, a student aid report summarizing information for your application and indicating your expected family contribution will be mailed to you.

In the meantime, you should have already applied for financial aid at the school where you’ve been accepted. An award letter from the school will indicate how much financial support the school is willing to offer. Should the award letter include a federal loan, you will need to complete a loan application for federal financial aid.

After you apply for a student loan and it has been duly approved, you will be asked to sign promissory notes. Then wait to see when the loan profits are sent to your school.

Numerous families are eligible for education financial aid but fail to benefit from it due to wrong assumptions that they don’t qualify. Don’t waste this opportunity for financial aid. In fact, all students are qualified for an unsubsidized federal loan as well as the benefits it brings so it would be good to take advantage of this.


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