Before you jump in and get an easily-approved student loan, saddling yourself with a large amount of debt after graduation, use the following loan calculators to determine repayment options. You should also investigate issues such as loan forgiveness limits, and default ramifications. Need-based loans originate from a variety of sources, and are not limited to Federal Government loan programs. Short-term loans may bridge the gap between the opening of classes, and subsequent financial aid disbursement dates. Be aware that there are variable interest rates, and penalties to pay if you lag behind on loan repayment.

Federal Direct Student Loans, also known as Direct Loans or FDLP loans, are funded from the Treasury, while private student loans are not guaranteed, and offered directly by participating banks, credit unions, and finance companies. When Federal student loans enter the repayment period, a borrower usually has up to 10 years to repay the total amount, and while federal student loans can be dismissed on the basis of permanent disability, private student loans typically can’t be discharged outside of bankruptcy proceedings. The best financial aid plan is to aggressively pursue scholarships, and grant funding where available, combined with personal savings.

FAFSA application, Step by Step
Apply for a Perkins Loan
Get a Student Loan
Subsidized Loans
Federal Perkins Loan
Federal Work Study Program

Private loan programs issue loans based on the credit history of the applicant and any co-signers. This contrasts with federal loans which focus on need-based criteria that is specified in the FAFSA. Moreover, private student loans have variable interest rates whereas federal loans generally have fixed rates. Loan applicants must be aware that private loans may require a large, up-front origination fee. Origination fees are a one-off charge based on the total amount of the loan. Private loans are therefore higher-cost than federal student loans, and are to be used only when students have exhausted borrowing limits under federal loan programs. Many private loans are pegged to a monetary index, such as the Wall Street Journal Prime rate, or the BBA LIBOR rate, plus an overhead charge if applicable.

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