Application For Federal Student Loans

So finally today we’re going to finish our discussion about federal student loans.

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If you have any questions at all feel free to email me directly. My email address is right here. And if I’m not online, my phone number is always listed below.

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I’ll keep it short.

All right, great.

So hopefully you guys learned something today.

If you didn’t already know what kind of student loan repayment plan was best for you maybe some of these things changed your mind.

I hope you enjoyed this video and thanks again for watching. See you next week.

Application For Federal Student Loans

What does the application entail?

The application for federal student loans is done online at www.federaldirectloans.com/apply/?. The requirements vary depending on what type of loan you choose. Most loans require at least half-time enrollment. Others have various specific guidelines including how long a school year should last and whether certain classes need to be taken.

Can I work while taking out loans?

Yes! You do not have to stop working if you take out loans. There are laws about this but they are rarely enforced. However, some employers may ask for proof that you were attending school. If you plan to continue working after graduation, then you may want to save money before applying for student loans.

How much can I borrow?

The maximum amount you can borrow is determined by your financial situation and family income, as well as your credit history. Your actual amount borrowed will depend on many factors. The maximum amount you can borrow for subsidized Stafford loans is $32,500 per year, or $16,250 over two years, and the maximum for unsubsidized Stafford loans is $28,850 annually. Borrowing more than your allowed amount may result in higher interest rates.

How do I know if my loans are subsidized?

If you qualify for subsidized Stafford Student Loans, then you will automatically receive a monthly benefit based on your family size and income. While you are enrolled in school, you will pay no interest. After you graduate or drop below half-time enrollment, you will begin making payments. Payments are made via direct deposit to your bank account. If you earn less than $50,000, you may qualify for a zero percent interest rate.

Where can I apply?

Application For Federal Student Loans

FAFSA

The Free Application for Federal Student Aid (FAFSA) is the primary financial aid tool that institutions use to determine financial need, award federal grants, and provide loans for students who qualify. Students may apply for the FAFSA at MyStudentAid.com and receive matching funds when they have completed their FAFSA. The deadline for submitting the FAFSA to the U.S. Department of Education is January 1st. If you file your FAFSA early, you may be able to save money on college costs.

Parent PLUS Loan

A Parent Plus loan is a type of federally subsidized student loan that lets parents borrow money to help pay for school expenses. Parents can get PLUS loans only if they do not have any outstanding debt. Parent PLUS loans should be considered only after all other options have been exhausted and all student borrowing limits have been reached. Parents can access this option by visiting www.studentaid.gov/PLUS.

Subsidized Stafford Loan

Subsidized Stafford Loans are low-interest, fixed rate loans that allow eligible undergraduates to borrow a maximum of $23,000 per academic year. Eligible undergraduate borrowers using subsidized Stafford Loans are subject to income restrictions, which vary depending on their family size and number of children. To learn about eligibility requirements, visit www.finaid.org/eligibility.html.

Unsubsidized Stafford Loan

Unsubsidized Stafford Loans are high-interest, variable rate loans that allow eligible undergraduate borrowers to borrow up to the full cost of attendance minus other types of education financing. You do not have to repay these loans while enrolled in school; however, interest accrues during the grace period and continues to accumulate until you leave school. Learn more about unsubsidized Stafford Loans at www.finaidcalculator.org.

Perkins Loan

Perkins Loans are low-interest loans for undergraduate students. Undergraduate students may qualify based on demonstrated financial need, enrollment status (full-time or part-time), and whether they plan to pursue graduate studies.

Graduate PLUS Loan

Graduate PLUS loans are available to graduate students who demonstrate financial need. Graduate PLUS loans offer higher interest rates than parent PLUS loans. Graduating students must complete and submit the free Graduation Financial Analysis Worksheet at MyStudentAid.

Private Loans

Private educational loans are offered directly by lenders to individuals. These loans do not go through the government’s direct lending program. Private loans are generally issued by banks or credit unions, but some colleges and universities also offer private loans. Private loans are not guaranteed by the federal government. Unlike federal student loan programs, private student loans cannot be discharged in bankruptcy.

Application For Federal Student Loans

How much student loan debt do I have?

Find out here! 2. What interest rate does my federal student loan fall under?

Learn how to calculate your interest rates! —

Here are some helpful links:

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Application For Federal Student Loans

You get loan money based on what your parents make. So if your mother makes $50,000 a year and her husband only makes $40,000 per year then you would get a $10,000 loan. (This assumes no income tax)

If you work full time at minimum wage you would only get about $200 per month and if you worked 20 hours a week you would get about $1000 per month.

Your loans need to be paid back monthly over 10 years, or you pay interest each month until it is all paid off.

Most people don’t know how much they owe because the government doesn’t tell them right away. Most don’t even realize they have student loans until just before they graduate college.

There is a way to get out of paying any payment if you declare bankruptcy. But you lose everything you own and you probably won’t be able to buy a house or car for several years.

After making payments for a few months you go to school and earn a degree. Once you complete a degree you start paying back the loan.

In some cases you may not have to pay anything back because you got scholarships or grants. However, these don’t cover the whole cost of tuition and other fees.

Some people think they can avoid having to pay back their debt by going to community college instead of attending 4-year university. Community colleges aren’t accredited so you cannot transfer credits for a bachelor’s degree.

If you take out private loans you will have higher interest rates than federal loans. Private lenders charge 18 percent per annum; whereas public lenders charge 8.25% – 9%.

Public lending options include Sallie Mae, Navient, FedLoan Servicing, and Nelnet. Private lenders include CITI, Higher One, and Great Lakes.

Sallie Mae and Navient do not offer consolidation programs. However, you can consolidate if you borrow from both. Both companies combine your debts and add additional costs associated with doing so.

As long as you make on-time payments, your credit rating won’t be negatively affected.

People who borrow less than $20,000 a year qualify for subsidized loans. These loans are issued by the Department of Education and are free of interest charges. They are paid back after 20 years.

Those who borrow more than $20,000 are eligible for unsubsidized loans, which means you pay the entire cost of education.

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