Facts about Federal Student Loans
We all know that education is the foundation on which dreams and ambitions are built. While commitment, perseverance, and focus are the major components of completing your education towards your career goals, at times, cost could be a deterrent. Thankfully there are many programs in place to make the cost of going back to school, not only realistic, but also flexible! One particularly helpful program is the Federal Student Loan program. Taking out a loan may seem daunting, but Federal Student Loans are structured to cater to students’ needs and make schooling a realistic possibility to many.
Unlike Private Student Loans, Federal Student Loans let students defer repayment until after schooling. Federal Student Loans usually have a lower interest rate than that of Private Student Loans. The interest rate for Federal Student Loans is usually fixed and often lower than credit cards and bank loans! If you’re from a low-income family you most likely qualify for a Federal Student Loan.
A Federal Student Loan does not require a co-signer or credit check! Federal Student Loans can be awarded without your past credit being considered. If you have no credit, a Federal Student Loan is a great and practical way to establish a credit history and score. If you have poor credit, getting a Federal Student Loan can actually help you build your credit back up!
It’s also great to remember that Federal Student Loans are flexible. Not only can payments be deferred until after you graduate, but they can also sometimes be lowered or deferred even further if you’re having difficulty with monthly payments. You can take advantage of payment deferment options if you decide to go back to school to further your education, or if you are in between jobs and cannot make monthly payments. Payment deferment options can also be used if you face a temporary period of disability due to hospitalization, illness, pregnancy, etc. To make things even easier, there are payment options that allow your payments to come directly from your income. In addition, there are debt forgiveness programs in place for teachers and those working in public service. Specifically, if you’re not in default on your loan, you’ve made at least 120 payments on it already, and you get a job in public service, you may be able to have the rest of your debt forgiven!
Stay tuned as we highlight the tax benefits of student loans and the cost of education in upcoming blogs. If you have any questions about realizing your career goal by going back to school and taking advantage of flexibility of Federal Student Loan, talk to an LA ORT advisor today!