Federal Student Loan Beaverton OR
Lake Oswego, OR
Student Loans - Info
If you are going to college, chances are you know exactly how expensive it can be and you already realize that a significant portion of your tuition will have to be covered by student loans. Not only do you have to pay for your tuition, but you also have to buy your text books and school supplies: this can add up to several thousand dollars in a very short period of time. You may have qualified for a grant or a scholarship, but will that pay for everything you need? In most cases it will not and if not, then you may need to consider getting a student loan. Student loans will give you the money you need to pay for your tuition and books now. While a student loan is included in the term financial aid, unlike scholarships and grants, you will have to pay a student loan back. You will need to sit down and add up how much you are going to need before you meet with a lender.
A student loan is generally offered to students in order to help them pay for the costs of their college education. Normally, a student loan will also carry a lower interest rate than other types of loans and are usually issued by the government. In the United States, these student loans come in several different varieties. There are Federal Student Loans that are made directly to the students, Federal Student Loans made directly to the parents, and Private Student Loans that are made to either the students or the parents. Some student loans may have a minimum amount and a maximum amount that you may borrow. You should research the types of student loans that are available to you before you visit your lender.
Things to Consider When Applying for a Student Loan
Before you apply for your student loan, you should make sure your credit is good because depending on what type of student loan you apply for, poor credit history can have a negative effect on your eligibility for a student loan. You will also need to consider what your starting salary will be when you do get out of school and get a job. If your future salary is going to be really low, then you may not be able to pay your loan back. Realistically speaking, you should borrow only the amount that you know for sure you can pay back to the lender. You need to factor in how much your monthly payments are going to be. The last thing you want to do is to get in way over your head and start your new career deep in debt. It is a good idea for you to create a budget that will ensure that you will not borrow more money than you can repay. There are calculators available online that can help you determine the amount of money you require to borrow in the form of student loans. The student loan calculators can help you predict how much money you will need and some student loan calculator can help you predict what your student loan repayments will be.
Something else you should consider is how much the interest rate on your student loan will be. You will want to get the lowest interest rate you can possibly find, but you will also want to make sure that you will be able to borrow as much as you will need at that rate. It will do you good to check with different lenders to see what rate they will offer you. You may find one that will offer you an interest rate considerably lower than anyone else's. By taking these considerations into account before you apply for your student loan, you can keep yourself from getting in way over your head.
Different Types of Student Loans
In the United States, a federal student loan is authorized under Title IV of the Higher Education Act. The first types of student loans are federal student loans that are given directly to the student. This type of loan is available to college and university students alike and they are generally used in addition to your personal and family financial resources, scholarships, grants, and work-study programs. Loans given to the student can either be subsidized by the United States Government or unsubsidized. It will depend largely on what your financial needs are as to which type of loan will better benefit you.
Whether your student loan is subsidized or unsubsidized, this type of loan is guaranteed by the U.S. Department of Education either directly or through another guarantee agency. Practically any student is eligible to receive this type of federal student loan regardless of what their credit score is or any other financial issues they may have. Generally, you will not be responsible for making a payment until six months after you graduate or three months after you drop from being a full time student to being a part time student. There are annual limits on how much you can borrow no matter what the amount is that your education will cost. Currently, that limit is $2,800 a year for freshman undergraduate students and will increase yearly until it reaches $5,500 a year for junior and senior undergraduate students. If you are going to be a student of medicine, these limits can be slightly higher.
Federal loans given to the parents are usually referred to as PLUS loans. This is an acronym for Parent Loans for Undergraduate Students. Parents are able to borrow a considerable amount more in comparison to what a student can borrow themselves. The amount a parent can get is normally enough to cover any gap in the cost of the student's education. Unfortunately, with this type of student loan, there is no grace period. Payments to pay this type of loan back will start immediately. If your parent gets this type of loan, then they need to be aware that they are the ones responsible for paying it back, the student has no responsibility for repayment. This type of loan is not a cosigner loan. If the parents do not repay the loan, then it will affect their credit negatively. Parents should be advised to think about "year 4" payments instead of "year 1" payments. It may seem manageable to pay $200 a month during the freshman year, but that amount can bloom to $800 a month by the time fours years have been paid for. Immediate repayment and the ability to borrow a significant amount of money can be a very dangerous combination.
Private student loans are made to the student through a private finance company. Sometimes this is through a bank and sometimes it is through a specialized education lender. Those that favor this type of loan will tell you that a private student loan will combine the best elements of the different types of government loans into one loan. The loan limits on a private loan are often higher than federal loans given directly to the student. This ensures that there is no budget gap left to the student. For parents, this type of loan does offer a grace period with no payments being made until after graduation. This grace period can range anywhere from six months post graduation to twelve months post graduation.