QandAs: Loans

What is a Federal Student Loan?

Answer:
A Federal Student Loan is a government loan

offered to undergraduate and graduate students to assist with the cost of tuition, books, and other education-related expenses. Funds are available to college students, and simple loan requirements make is possible for everyone to qualify for assistance.

There are various Federal Student Loan programs available. Stafford Loans is the most common, and this includes the Federal Family Education Loan and Direct Loans. Undergraduate and graduates apply for these loans, and they are responsible for repayment. PLUS Loan is another Federal program that provides education assistance. The main difference is that parents acquire and repay these loans for their children.

Federal Student Loan programs offer several great benefits. The majority of the programs are non-credit based, which allows students with bad or no credit history to qualify for a loan. Credit checks are a requirement with PLUS Loans. In this case, a parent's credit history determines loan approvals. In addition, Federal Student Loans offer low interest rates, no payment until graduation, and students can take advantage of several repayment options such as deferment and forbearance. Refinances are available with Federal Student Loans, wherein graduates can consolidate all their student loans and reduce monthly debt payments.


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