Federal Student Loan Essential Basics
If you are a student looking for financial aids to pay your tuition and educational expenses you have two main sources to consider: private or federal student loan which can be subsidized or unsubsidized.
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 different financial institutions offering federal student loan, and each program has different repayment conditions. It is wise to solicit advice from your parents and other sources before you decide what type of program would suit you best. You can also contact an advisor in your school for a piece of advice.
The problem, a federal student loan is often not sufficient to cover all learning expenses. Therefore you would probably also need a private loan to supplement it. This money can be applied to any of your educational needs.
Federal loans can be challenging. If you acquire several of them with varying repayment periods and payment amounts, it will be a challenge to manage your cash flow and repay your debts. For instance, with a federal student loan, you will have to start making your 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.
Federal Student Loan Application
When filling out an application for a federal student loan, there are some tips you can use 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 use on the form.
It is important to get started early when filling out your federal 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 a FAFSA application.
And finally, if you include the money of the loan in your budget, remember that with federal student loan there are fees that are deducted from the amount you applied for; that is, you will not receive the full amount. Therefore, consider adding some extra on the exact amount you need.