Federal Student Loans

Posted on August 22, 2016 by

download-5Do you need to apply for Federal Student Loans? Receiving a college education may be the single most important accomplishment that one may achieve in their entire life time. In a recent report, the US Department of Education stated that over eighteen thousand men and women had enrolled in a degree-granting institution for that year, and by 2016, those numbers will have had increased to nearly twenty-one thousand students.

Recent facts regarding tuition at Stanford University showed that out of the 6,689 students enrolled over a four quarter term, 5,197 of the students required financial aid at an average debt cost of over $16,700.

Do you need to apply for Federal Student Loans to pursue your college degree? 
With the costs of college tuition increasing every year, it is becoming more and more difficult for students to afford the required funding to attain a college degree. With Federal Student Loans, many are afforded the option of college which may not have been available otherwise.

Of the more popular Federal Student Loans, are Federal Stafford Loans. Federal Stafford Loans come in two forms:

  • Subsidized Stafford Loans
  • Unsubsidized Stafford Loans

Other Federal Student Loans are: Federal Perkins Loans and Federal PLUS loans

  • Federal Perkins Loans
  • Federal PLUS Loans
  • Federal Graduate PLUS Loans
  • Federal Student Consolidation Loans

Below, are some of the features and benefits available to those students that elect to seek educational funding assistance through Federal Student Loans:

  • With a Federal Student Loan, the credit of the student is not taken into consideration.
  • If a student so decides to start paying off the debt ahead of schedule, there is no penalty for early payment.
  • In the event that financial difficulties arise, or the student wishes to consolidate the loans, there are many options available.
  • As long as the student is enrolled at least of half of the time, payments are not required.
  • There are several payback and deferment options such as Military service or graduate school.
  • Even after graduation, there is still a six month grace period before payments are required.

Federal Student Loans offer many benefits over traditional loans as well. For example, the Federal Student Loans offered by the government are usually given at a lower, fixed interest rate, where loans that are offered by banks and lending institutions are not. Combined with easy repayment terms, there is a wide margin of financial freedom with the flexibility these loans provide. Moreover, there are even alternative loan payment options which may be available, such as income based, sliding scale loans. Furthermore, there is a level of loan forgiveness which is not available through traditional private funding.

Every year, the cost for both four year public and private college educations have been increasing steadily. In a recent report given to the house of representatives by the United States Government Accountability Office, the average tuition for a four year private education increased $7,330, up 38% in the last ten years alone.

HOW TO REPAIR YOUR CREDIT SCORE

Improving your credit score takes time – there are no quick fixes. In fact, any method that promises a “quick fix” for your poor credit score will likely backfire. Ideally, the best way to improve a credit score is to manage credit responsibly. If you’ve failed to do that, there are ways to help repair your credit history and slowly but surely improve your credit score.

Check Your Credit Report
Once a year, you can request a free copy of your credit report. This is an important step to take because it allows you to review your report and check it for any errors that could be negatively impacting your score.
In particular, make a note of the open accounts listed on your report and make sure the totals owed for each are accurate. You’ll also want to make sure there are no late payments incorrectly reported on your account. If you do find errors, contact the credit bureau and work with them to dispute the erroneous reports.

Pay Bills On Time
This sounds like common sense, but it can be very easy to overlook a bill that’s due. To make it easier for you to pay your bills on time, set up payment reminders that will alert you via text or email when your bill is due.
You can also enroll in automatic payments if you habitually forget to pay your bills on time. That way, bill payments are automatically debited from your bank account. Even one missed payment – whether it’s a day late or a week – can drastically affect your credit score.

Reduce Your Debt
While this is easier said than done, one of the best ways you can begin improving your credit score is to reduce the amount of debt you owe. Avoid accruing new debt, and instead begin working with your lenders to arrange a payment schedule that works within your budget.
If you have debt on multiple credit cards, work on paying off the highest interest rate cards first, while maintaining your minimum payment on lower interest rate cards.

Consult a Credit Counseling Service
Every state has non-profit groups designed to offer credit guidance to consumers. If you find you’re having trouble paying bills on time or paying off debt, a credit counseling service may be able to help you find a payment solution that works for you. Often, these programs are available for little or no cost.

Improving your credit score takes time. While the task may seem daunting, improving your credit score and paying off existing debt will be worth it in the long run. By changing your old habits now and learning to be responsible with credit, your score will improve over time.