A student who wants to loan money for her studies have two main sources to consider: the government or federal loan, or the private loan.
A federal subsidized student loan means the federal government makes the interest payments to the financial institution for the period that the student is in college or at university, as well as during the grace period granted to the student.
There are many federal direct student loan programs available from different institutions. It is wise to solicit advice from your parents and other sources before you decide what type of federal direct student loan would suit you best.
A federal loan is often not sufficient to cover all your expenses. Therefore you would probably also need a private student loan to supplement a federal loan. This money can be applied to any of your educational needs.
Federal loans can be challenging. If you acquire several federal loans with varying repayment periods and payment amounts, it will be a challenge to manage your cash flow to service these loans at the appropriate repayment dates.
With federal loans, you will need to start making your loan repayments six months after your graduation or after you’ve left school. It is important to plan and budget for this because it can make a hefty dent in your monthly budget.
When filling out an application for a federal student loan, there are some tips to make the process a little easier.
The first form you will need to fill out is the Free Application for Federal Student Aid (FAFSA) form.
You need to be organized and gather all the information that you are going to need to fill out the forms.
It is important to get started early when filling out your federal government student loan application. Do not wait until the last minute because you do not want your application to disappear in the usual last minute avalanche.
When filling out the forms, allocate sufficient time for the activity. It can easily take up to an hour to complete the application.
When you include the student loan money in your budget, remember that with federal student loans there are fees that are deducted from the loan amount, which means you will not receive the full loan amount.