If you don’t qualify for grants or don’t have enough grant money to cover your education costs, you can get safe student loans from the federal government. You’ll find out how much you’re eligible to borrow when you get your FAFSA results.
Federal student loans are the best college loans for the following reasons:
- Federal student aid interest rates are fixed, which means the rates cannot go up over time.
- They can be subsidized, which means the government covers some of the federal student loan interest rate.
- You may be able to consolidate or refinance federal loans if you’re having trouble repaying.
- You won’t need to repay them until you leave school.
The two main types of federal student loans are direct subsidized loans and direct unsubsidized loans. Federal direct subsidized loans are available to undergraduate students who demonstrate financial need. The government will cover the interest on these loans while you’re enrolled in school and in certain other situations.
Federal direct unsubsidized loans are available to undergraduate and graduate students. They are not based on financial need, so more people qualify. You can qualify for up to $12,500 in federal student loans as an undergraduate. Meanwhile, graduate students can borrow up to $20,500 in graduate unsubsidized loans.
It is important to understand that taking out a loan is a legal obligation and you are required to repay the full amount you borrowed plus interest. When deciding how much to borrow, there are a few things to keep in mind.
- Don’t borrow more than you need for school-related expenses.
- Find out how much a starting salary is in your desired field. A portion of your salary will go towards repaying your loan.
- You must make your payments on time.
You must submit your Federal Student Aid (FAFSA form) in order to apply for a federal student loan. The fastest way is to file your FAFSA application online. It takes about three to five days to be processed. If you apply through the mail, processing your application can take up to 7 to 10 days. The FAFSA application is free. Your college or vocational school will send you a financial aid offer, which will tell you how much federal student loans you qualify for.
Remember, you do not have to accept the entire loan amount if you don’t feel comfortable paying that amount back later on.