Federal student loans in the United States are an authorization of title IV of higher education act as amended. It is a tough job for students to pay the huge educational expenses these days and hence the concept of federal student loans – financial aid was developed The federal student loans- financial aid are the largest source of financial aid in the US shedding out more than $100 billion every year for education programs.
Federal student loans may be subsidized or unsubsidized and are of different types such as Stafford loans, Perkins loans, Federal family education loans etc. but the eligibilities for all of them are as under
The applicant must present the need for the applied financial aid.
The student must possess a high school diploma or a GED (general education development) certificate.
The applicant must be a US citizen, or eligible non-citizen, or permanent resident.
The applicant must have a valid Social Security number.
The applicant must fill in the FAFSA (free application for federal student aid) form before the deadline usually January 1st is the starting date.
The past as well as present academic record should be good.
Certification of not owing any federal student loan and that the provided aid will be used for educational purpose only.
Once the formalities are done the colleges will assess the details and will provide the appropriate loan.
One should differentiate between loans which are to be repaid and grants which are not repaid.
Advantages of federal student loans
The interest rates offered by federal government are very low.
Once the education is complete the and when the student finds a job, it is then he repays the federal government in easy installments. This is an excellent feature as in other financial loans the student has to pay interest few times every month which is a difficult task.
There is no hefty processing fee involved in federal student aid.
A consolidated federal student loan is helpful if the student has a bad history with default payments. A consolidated loan is an addition of different federal loan a student took in his academics.
A consolidated federal student loan enables a student to extend his repayment plan from 10 to 30 years.
Hence a federal student loan is very effective for student to complete his education, with fewer risks.
