Direct Loans are what the Department of Education offers for federal student loan help in affording the expensive cost of a college education. Most financial advisers would recommend that both student and parent apply for the most help through the federal government prior to using private lenders. The government offers lower interest rates for their loans and benefits to repayment plans.
*Direct Subsidized Loans are given to undergraduates. The amount given is based on year in school and financial need. Subsidized loans will have the interest charges taken care of by the government while the student is in school and for most cases, during the six month grace period.
*Direct Unsubsidized Loans are also for undergraduates but are not based of financial need and the interest applies once the money is received by the student.
*Direct PLUS Loans are unsubsidized loans for parents with dependent students and for graduate/professional students. These loans will help pay the difference of the cost of attending minus other financial assistance received. Interest is charged throughout the loan.
*Direct Consolidation Loans is offered as federal student loan help which will combine all federal loans into one.
The clincher with parent loans is that their credit must support this additional loan. Bad credit will not qualify. Parents must be US citizens or eligible noncitizens without their own default federal loans or behind on payments.
The FFSA must be filled out each year in order to qualify. Loan amounts will be reevaluated according to the new application. Some schools offer online applications. If you have more than one child needing federal student loan help parents will have to fill out separate forms for each.
Once graduation comes around, parents and students should be looking at ways to filter this new payment into their monthly budget. It is always good to understand what the payment options are when taking out the loan in the first place. Many people are looking at student loan relief services to see what their options are. The service will not only tell you what programs the loans will qualify for, but will also process the applications through the proper channels.
There have been negative reports concerning these types of relief services, but like any other financial service, there is a spectrum of good companies that provide quality services at competitively low prices. Take advantage of free consultations to weed out the overpriced or less qualified companies.
Once your loans are in eligible prepayment plans you will be able to live more comfortably. Between consolidation loans, forgiveness programs and income-based repayments plans monthly student loan payments will be very affordable.
Don’t let federal loan benefits slip you by just because you are unfamiliar with the information or have no time to work through the government red tape. Take advantage of what the Department of Education is offering. Call a student loan debt relief company today for your free consultation.
If you have private loans, you will need to consolidate them within the private sector. There are no federal student loan help programs which service private loans.