Things You Need to Know About Federal Student Loans

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Funding your education can be a daunting task for most of us. Unless you are born into a privileged family, finding money to further your academic goals may pose considerable challenge. One very popular way to fund your college education is by getting student loan. Yet with too many institutions offering loans of various kinds and with different rates, how do you select the best one for you? Why not consider Federal Student Loans?Getting to Know Federal Student Loans What are actually federal Student Loans? Federal Student Loans or Direct Loans are part of the federal student aid administered by the UDS Department of Education. These are special loans not offered via private lenders or companies but they are made in agreement between the student and the US Department of Education.Those who wish to apply for a Federal Student Loan must fill in a Free Application for Federal Student Aid (or FAFSA) which can be done via the Internet. Just include all the necessary documentations and information required. Additionally, students must complete a Master Promissory Note (or MPN) which is actually a legal document that explains the contract between the related parties. All the terms and conditions of the loan are stated in clear terms in MPN as well.Getting the LoanAfter successfully securing one of the loans, student may sign up and use the service center. By gaining access to this feature, they may view the loan amount and all related information. Plus, you may also opt to use the services of a counselor form a direct loan servicing site. .It is quite easy to qualify for the loan, you just have to be enrolled in a school that is eligible for the direct loan student loan. And you don’t have to be a full-time student either, you can ask for a Federal loan or direct loan even when you are on a studying part time basis.The Most Common Types of Federal LoansGenerally, there are two most common types of federal loan or also referred to as Direct Loans:- (i) The Subsidized Loan The Federal Subsidized Student Loan has an interest paid subsidy that it lightens the burden of the student to manage. Now, Students don’t have to worry about the interests as they are fully paid by the Government. That should be a reason to have greater peace of mind and to excel in the current academic pursuit. (ii) Unsubsidized Stafford LoanThese are meant for graduate student who have families of their own to support, or if they have no living parent to support them. These are loans with low interest. There is a limit you can get with these kinds of loan and students can expect around $8,000 in total amount.Federal Student Loans do have a fixed interest which is determined every July 1st. There is a minimum fee incurred, which can be set up to 4%, which is used to offset the cost of managing the services of these programs.