We've all read, or heard, about the runaway costs of a higher education. Both public and private colleges and universities are now charging students $20,000 to $70,000 annually to attend school. Costs of this magnitude mean that finding a student loan to help finance college costs is essential to most families and students.
The good news is that according to the Department of Education, a college or university is likely to provide nearly as much funding as the federal government. Families need to contact the school's financial aid office to find out what help is available. Graduate students might also want to check with their department's chairperson.
In this article, we're going to concentrate on the federal student loans available to the public. We've mentioned in our Federal Financial Aid article the types of aid available fall into three categories: grants, work study, and student loans. Let's take a closer look at each of these financing options.
Grants are financial aid that does not have to be repaid. The federal government sponsors two programs:
With work study programs, the student is earning money while enrolled in school. The money earned is applied to educational expenses.
Federal student loans are borrowed money and need to be repaid with interest. Some programs allow the parents and / or the student to borrow money. The student loans offered from the federal government include:
There is a three step process to follow when applying for a student loan:
Financial aid administrators are a useful and helpful source of information on grants, work study, and student loans. The college or university they're planning to attend will eventually package their offer of aid, and present that information back to a student's family in the form of an Award Letter.
Once the federal student loan or student aid options are exhausted, the next logical step would be to seek a private student loan. These types of loans are becoming increasingly popular. This is due to the fact the size of federal grants and loans have not been keeping pace with the rising costs of tuition and college living expenses.
There is a fairly robust market when it comes to financial institutions that are willing to lend students money. Citibank, Chase, Wells Fargo, and Bank of America are some of the larger banking lenders that specialize in this area. In fact, all of these private lenders run accredited programs aimed at meeting the financial needs of students.
Eventually, students will need to start repaying their loans. If a student has completed four years of undergraduate work and / or attended graduate school, the number, and complexity of their student loan structure can be confusing.
At this point, many student borrowers will look for help in managing their payments. For example, a student may be interested in paying off their loans as quickly and efficiently as possible. They may also want to make sure they're meeting all of their obligations on time, so that they can start building their credit scores.
Sallie Mae has been helping students manage their student loans for over 30 years. If the idea of managing loans online, and in one place, is appealing, then take a close look at Sallie Mae's offerings.
Perhaps the ultimate in management services is the ability to consolidate several student loans into one larger loan, requiring only one monthly payment. That's where consolidating a student loan offers help.
Eligibility rules, student loan types, and interest rate calculations, can be difficult for many of us to understand. Fortunately, the student loan consolidation center will walk the borrower through both the decision making process and consolidation loan applications.
More information on student loan consolidation can be found by visiting the student loan center. Run by the Department of Education, the website contains information concerning repayment periods, loan terms and conditions, consolidation tips, checklist tools, and even online forms that can be used to apply for a consolidation loan.
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