College Student Loans – What They Are and How to Get Them

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College students loans are meant to assist College Students. They are also called Federal Stafford Loans. College student loans are perhaps the most affordable ways to pay for school.As the educational institutions raise their tuition fee, this has become a part of living.Advantages of College Students Loan:
They offer lower interest rates when compared to the private student loan. The interest rates go up to 6.8%
No collateral or credit check is required.
Upfront cash rebates of about 2% and 3% cash rebate on the balance after paying for the first 30 months of consecutive on time payments.
The college student loan repayment is postponed until the students are out of the school. The students need not repay until they are in school.
Stafford student loan rates are lower than other forms of consumer financing.
When used audio debit for repayment the interest reduction is up to .375%
They can be easily consolidated.
Tax deductions are done
Flexible multiple repayment options are available for the students.
Cosigners are not required as compared to the private student’s loan.
Types of College student’s loan:
Subsidized Loan: While the student is in school, repayment need not be done and the government would pay the interest during this term. Also during the grace period and other deferment periods, the government would pay the loan interest. However, for such a criteria to exist, student must provide valid proof to show that they are not in a position to repay the loans. (i.e., they are still in an educational institution).This is otherwise called as subsidized Loans. The amount of loan lent depends on the FAFSA form details.
Unsubsidized Loan: In this type, students are the one who pay the interest. Until their educational term, the payments would be deferred. Once they complete their course, they must pay the interest that was deferred so long. An eligibility criterion does not exist for this kind of loans. These are otherwise called as unsubsidized loans. The lent amount depends only on the educational details irrespective of the financial status mentioned in FAFSA form.
Repayment of College Student Loans
Repayment starts only when the student leaves the educational institution. This mostly starts up after 6 months of awaiting and until when the student earn at least a minimum monthly salary of $50.
No repayment penalty is made.
Repayment periods may generally vary from 10-15 years.
Eligibility Criteria:
The student must be working towards a degree or certificate that is eligible for application of this loan.
One must be able to show valid proofs for the financial status.
High school diploma certificate is essential. This must be approved by U.S. Department of Education.
Other standards of the state must also be met as per the department approval.
Must be a US citizen or an eligible non-US citizen.
One must have a valid SSN(Social Security Number)
Maintenance of satisfactory academic performance in the educational institution.
Promise that this would be used only for educational funding.
Application Procedure (From Source):
Complete the FAFSA form
Next, complete the Master Promissory (MPN) form.
Complete the U.S. Student Information Form
Submit the MPN form and the U.S. Student Information Form (described above) to the Financial Aid Manager at Financial Aid, Newnham Campus.
Submit your Student Aid Report (SAR) to Financial Aid along with the above.
Send a hard copy of your Student Aid Report (SAR) Student Financial Services; you can print this form from the FAFSA site after you have completed the form.
The Financial Aid Manager will then certify your loan and submit the forms to the potential lender/guarantor for disbursement.
Loan Amount Calculation:
COA: Cost of Attendance The Cost of Attendance (COA) includes not only tuition and fees but also living expenses, books, supplies, personal expenses and transportation costs for the eight month period while you will be in school. The Cost of Attendance = (COA) – (EFC) – (EFA)
EFC: Expected Family Contribution The Expected Family Contribution (EFC) is based on the students (and if applicable, the students families) income and assets, as was reported on the FAFSA form. The EFC is reported on the SAR and the Institutional Student Information Record (ISIR). It is based on an eight months period of enrollment.
EFA: Estimated Financial Assistance The Estimated Financial Assistance (EFA) usually takes the form of scholarships, grants, loans, or work that is awarded based on post secondary enrollment.
The loan amounts are calculated by the following formulas:
Subsidized loan = (COA) – (EFC) – (EFA)
Unsubsidized loan = (COA) – (Subsidized Loan) – (EFA)