Know the Various Types of Federal Loans and How to Make Use of Them

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There are different types of Federal Loans to aid undergraduate or graduate students and their families afford the cost trade school, college, and universities. These loans are given out by the U.S. Department of Education and are available to those who qualify. There are different types of federal loans each of which is intended for different type of people and their situation. Each of these loans has it own pros and cons. Some of them you have to pay interest on them sooner that than others. Let’s take a look at the four major Federal loans and how to make use of them.Stafford Loans – these are loans made available to college and university students with low EFC (Expected Family Contribution). A student’s qualification for this federal loan is determined by the information provided on the Free Application for Federal Student Aid. Based on your financial need as determined by the school, you could get a subsidized Stafford loan (meaning no interest will be charged while enrolled in college). Otherwise, you will be charged interest from the time the loan is disbursed until it is paid off.
Parents Loans for Undergraduate Students (PLUS) – these loans are for parents whose dependent kids are undergraduate students at colleges. PLUS loans are unsubsidized and borrowers do not have the option of grace periods or deferring payments. In order for parents to qualify for this loan, the kid must be enrolled at an approved college, university, or trade school.
Perkins Loans – these are available to graduate and undergraduate students. Like other loans mentioned above, qualification is determined by the financial information provided on your federal student aid application. The funds are given to the post secondary institutions, who then disburse them to the students. For those who plan on undertaking teaching, military, or public service field could benefit greatly from this loan because they can defer payment for a loan time or even have the principal amount of the loan canceled.So as you can see, the U.S. Federal Government has billions of dollars available for eligible students and parents to further their dreams of getting a higher education. All you need to do is find an approved institution of learning and they will provide you with details and requirements needed.


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