Fannie Mae Student Loans Guidelines

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Fannie Mae student loans are government-sponsored student loan programs, issued under authority of the Federal Family Education Loan (FFEL) Program, enacted in 1965, and administered by Fannie Mae, a United Statesgovernment sponsored enterprise. Student borrowers use these loans to assist them in paying for college costs. There are two types of FFEL loans: subsidized Stafford loans and unsubsidized Stafford loans.

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Fannie Mae Student Loans Guidelines

How Long Should You Wait After Graduation?

This is a tricky question. There are pros and cons to waiting until after graduation before starting debt repayment, especially if you have a job lined up right away. If you take out a loan while you’re still in school, it’s possible that the interest rate could increase once you graduate, though you probably wouldn’t notice a difference in the interest rate based on what school you attend (and how long you attended). On the other hand, it makes sense to start repaying loans as soon as possible, even at low rates, since your income increases over time.

If you graduated last year or two years ago, then chances are you won’t even be in a position to earn enough money to make a significant dent in those student loans. But if you are graduating this year or next, you might want to consider taking out federal Stafford loans, rather than private loans, since they offer higher monthly payments (the maximum payment per month is $8,000 for a borrower who receives financial aid), but lower annual fees. Private loans tend to have significantly higher interest rates than federal loans. Federal loans also have fewer restrictions on their eligibility requirements, which means that you may qualify for them no matter where you go to college, whereas private loans typically require you to attend certain accredited schools, and some private lenders won’t give you loans unless you get a specific grade point average (GPA) — which isn’t always possible.

If you do decide that a private loan is best for you, keep in mind that many of these types of loans offer attractive interest rates, but they may not be eligible for deferment. Deferment is a way for borrowers to postpone some of their payment obligations, which is especially helpful for students who are currently unemployed. A lot of private loans don’t allow you to defer any of your payments; however, some do, so ask your lender about its policies regarding deferments. Before signing anything, understand exactly what types of loan options are available to you, as well as how much you would pay each month if you were able to defer or roll over your loan payments. Remember — interest accrues on both principal and unpaid interest.

So, now that you’ve figured out whether or not you should wait to begin paying back your Fannie Mae student loans, let’s talk about how to set yourself up for success.

How Do I Get Started Repaying My Student Loan Debt?

The first thing you need to do is figure out how much you owe. To find this amount, look at the sticker price of your degree program, and then calculate the total cost of attendance (COA) – the costs associated with attending school, including tuition and fees, room and board, books and supplies, transportation, and personal expenses. If you didn’t receive financial assistance from the government, you’ll need to subtract your expected earnings upon graduation from the sticker price. Then add the COA to your current balance.

Once you know how much you owe, you’ll need to calculate your monthly payment. Use the following formula to calculate how much you should be paying each month:

Your Monthly Payment Your Current Balance x 0.01 + 0.05

For example, if you have a $10,000 balance and your monthly payment is $500, your monthly payment equals 10% of your balance ($500/10000 .1) plus 5% of your balance ($0.05/10000.005) times 12 months. So, in this case, you’d pay $500 per month.

Make sure that you adjust your monthly payment to account for any additional taxes or insurance plans that you have. Also, if you plan to apply for a loan consolidation, make sure your monthly payment doesn’t exceed 35 percent of your gross monthly income.

Once you know the minimum payment amount, it’s time to shop around for the best loan product for you. Look for a loan that offers competitive interest rates and flexible payment terms. For instance, if you have an active military ID, many banks offer special programs for members of the armed forces. And if you’re a veteran, check the VA loan option. You may also want to compare different student loan products offered by various lenders, and choose the one that pays off your debt more efficiently.

Fannie Mae Student Loans Guidelines

Private student loans are considered unsecured debt and usually have variable interest rates that start at 0% APR. While these loans are less expensive than federal loans, they tend to carry higher fees. If you’re looking to borrow money for school, you should check out private loan options first.

Federal student loans are guaranteed by the U.S. Department of Education, and their interest rates are fixed. You’ll want to apply early to avoid paying interest while waiting to graduate.

There are two major types of federal student loans: Stafford and Perkins. Both offer flexible payment plans and low introductory rates. However, if you plan to attend law school, you might consider a Law School Loan (LSA), which offers an even lower rate and fewer restrictions.

Your lender may charge you closing costs for each type of loan. Check with your lender for details.

Repayment terms vary according to how long you take to finish school, what kind of program you pursue, and your income level after graduation. A bachelor’s degree takes 4-8 years to complete, depending upon the field, so expect to pay back the principal on a federal loan over 10 years. Graduate programs require 5-10 years to complete, so they may last 10 years.

Federal loans are generally forgiven after 20 years of payments if you qualify based on financial need and employment history. Private loans are not eligible for forgiveness.

Federal loans do not allow students to consolidate their loans, but private student loans often do. Consolidating your loans could reduce monthly payments, though it won’t help your total amount paid off.

Fannie Mae Student Loans Guidelines

Your loan amount should not exceed $20,000 for private loans and $10,000 for federal loans.

You’ll want to know how long until you’re eligible for repayment as well as what interest rates are being charged. Private loans allow 10 years, while federal loans have 20-year terms.

Always remember to pay your student loans monthly. If you don’t make payments, you’ll end up accruing fees on top of the principal and interest that you owe.

Avoid paying off your student loans early. By doing so, you may lose out on any potential tax advantages and increase the risk of having to refinance later if rates go down.

When you do decide to refinance, consider getting auto-debit financing. This way, you won’t have to worry about making extra payments to keep your car loan current.

Fannie Mae Student Loans Guidelines

What Is Fannie Mae?

The Federal National Mortgage Association (FNMA) was founded in 1968 by Congress under the Housing Act of 1934. Its mission is to make housing more affordable by providing liquidity and stability to home lending markets. In addition, FNMA provides mortgage insurance to help borrowers meet their financial responsibilities.

What Are the Guidelines for Fannie Mae Student Loan Consolidation?

To consolidate student loans, you need to have at least a $10,000 credit line balance in order to qualify. You should also have no default on any of your loans. If you have any existing federal student loan debt, you may not qualify for consolidation if it exceeds $20,500.

How Can I Apply for Fannie Mae Student Loans?

You can also call 1-800-557-9777 or visit your local branch office.

How Much Will These Loans Cost?

These loans will cost about 2 percent per month compared to 10 percent interest rates on original loans. However, you might want to consider shopping around for a lower rate. There are several lenders who offer these types of loans, including Sallie Mae, Citibank, Capital One, and many others.

Conclusion

If you want to consolidate your student loans, you need some extra cash and a stable job before attempting to do so. Make sure you check out the guidelines outlined above to ensure that you are eligible for these loans. Good luck!

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