Lowest Interest Rate For Student Loans

Federal Stafford Loan : 4.29% fixed rate/variable rate – This is the lowest interest rate for student loans offered by the US Dept. of Education. You may qualify for subsidized loans if you meet certain income requirements.

Private Student Loan : 6.41% fixed rate/variable-This loan offers a lower interest rate than the federal option; however, it comes with higher fees. If you choose private lenders, make sure they offer low rates without exorbitant fees.

Parent PLUS Loan : 5.84% fixed rate/variable – This loan provides parental financial assistance to students who need funds beyond those covered under the federally funded student loan programs. However, the interest rate and monthly payment amount are not eligible for subsidy.

Unsubsidized Direct Loan (10 year) : 6.21% fixed rate/variable (6.31% variable)-The unsubsidized direct loan is one of the oldest types of student loans still available today. While it does not receive the same type of government subsidies as its counterpart, the direct loan program, it does have significantly less expensive monthly payments.

Income Based Repayment Program : 5.15% fixed rate/ variable rate – This repayment plan requires borrowers to pay 10 percent of their discretionary income towards repaying their loans each month. Borrowers do not pay any interest while making payments toward their loans. Once a borrower reaches 20 years of school, these payments end permanently and borrowers begin to repay the remaining balance at a standard 10% APR.

Graduated Payment Plan : 9.19% fixed rate/variable/inflated – The graduated payment plan gives graduate borrowers three different options to choose from based on their current income level. Graduate borrowers that earn $50,000 per year or less pay nine percent of their discretionary income every month. Graduate borrowers that earn between $50,001 and $110,000 pay eight percent of their discretionary income each month. Finally, graduate borrowers that earn over $110,000 pay seven percent of their discretionary income toward repaying their loans each pay period.

Income Contingent Repayment Plan : 5.15% Fixed rate/variable rate – Similar to the above plan, the income contingent plan bases repayment amounts on borrowers’ salaries at the time of graduation. Undergraduate graduates pay five percent of their earnings after tax until they reach 120 percent of the poverty line. After reaching 120% of the poverty line, undergraduate borrowers start paying 10 percent of their post tax income toward repaying their loan balances. Graduate borrowers pay 15 percent of their earnings after taxes until they reach 140 percent of the poverty line and then continue to make payments at the 10 percent rate.

Pay As You Earn Plan : 5.63% fixed rate/variable, 3.54% fixed rate/variable for Public Service Employees – The pay as you earn plan requires borrowers to contribute a percentage of their monthly paycheck toward repaying their student loan debts. Borrowers must contribute between 1% and 10% of their monthly wages to the program. These contributions can be deducted from borrowers’ gross incomes before taxes. However, borrowers cannot deduct any portion of their contribution from their adjusted gross income.

Lowest Interest Rate For Student Loans

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You have options for student loans!

U.S. Department of Education loan programs :

Federal Parent PLUS Loan Program :

Perkins Loan :

Income based repayment (IBR) plans :

Pay As You Earn Repayment Plan :

Lowest Interest Rate For Student Loans

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Lowest Interest Rate For Student Loans

Federal student loans

The federal government began offering private student loans in 2010. However, they did not start charging interest until July 2015. In order to qualify for a private loan, you have to meet certain criteria. You need to sign a contract stating that you agree to pay back the money borrowed plus interest. Also, you cannot already owe any student loans at the time you apply. Private student loans may carry higher interest rates than federal ones. Additionally, if you default, your entire debt could be discharged.

Educational tax credits

If you work full-time while attending school, you may be end to certain tax breaks. These tax breaks vary based on whether your employer offers tuition assistance. If you do receive these tax breaks, then you should report them on your taxes. Tax credits can reduce your taxable income and can make paying off student loans easier.

Refinancing college debt

A refinancing can lower your monthly payments significantly. Since your payment would be applied to your old debt rather than the new debt, your new balance would be lower. You would still have to repay the amount taken out of your paycheck from your previous job. You might also want to consider consolidating your loans. Consolidation lowers your interest rate, lowering how much you pay per month.

Scholarships

Scholarships are often offered by colleges and universities specifically for students who plan on going to graduate school. Students who receive scholarships will likely have their financial burden lowered. Many institutions offer merit-based scholarships.

Grants

Grants are issued directly by the federal government. There are grants offered for everything from education to medical care. You just need to fill out an application, provide proof of eligibility, and wait for approval. Most grants require repayment. But, you don’t necessarily have to pay anything back.

Family help

Your parents may be able to give you some extra money for school. Just remember to tell them what you need it for. Even if they can’t help, they can still be supportive.

Lowest Interest Rate For Student Loans

Federal student loans have some of the lowest interest rates out there.

There are two types of federal student loan programs.

Direct Subsidized Loans. These are federally-backed loans that don’t require repayment until after graduation. They cover tuition, fees, books, supplies, and housing costs. Students may borrow up to $23,000 per year and remain eligible for subsidized loans while they’re enrolled at least half time. Income eligibility varies based on family size and number of dependents. After graduating, monthly payments begin. If borrowers drop below half-time enrollment, their subsidized loans convert to unsubsidized.

Direct Unsubsidized Loans. These aren’t backed by the government and only cover tuition, fees, and room and board. Borrowers can borrow up to $20,500 annually and stay eligible for them while enrolled at least half-time. Payments end when students graduate or leave school early. After school, monthly payments start unless they opt for income-based repayment plans that cap monthly installments at 10% of discretionary income or 15% if they earn less than $25,000 annually.

Perkins Loans. Perkins loans are subsidized by the U.S. Department of Education. Eligible students can borrow up to $28,000 per academic year over four years. Like direct loans, Perkins loans continue to be eligible after graduation or dropping below half-time enrollment. Monthly payments start after graduation or leaving school early. Once borrowers meet certain criteria, they can switch to income-based repayment plans.

PLUS Loans. PLUS loans allow parents who take parent-only loans to add additional funds for undergraduate expenses. Parents can borrow up to $31,000 over four years. Monthly payments begin after graduation or leaving school and continue until borrowers reach 20 years of age or die, whichever comes first.

Private student loans. These can be a great option for those who need larger amounts of money to help finance their education. However, private lenders offer higher APR’s and often charge origination fees.

Payday advances. A payday advance is a short-term cash advance that lasts between two weeks and three months. While these are sometimes presented as a solution to financial problems, many people find themselves facing significant debt due to high APRs.

Payday lending. These small dollar, short term loans carry high interest rates and are not recommended. Many states prohibit payday lenders from operating within their borders.

Refinancing existing student loans. You could consider refinancing your current student loans in order to lower your payment amount. Be sure to shop around and compare quotes from several lenders before making any decisions.

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