Every old wealth must give way so that new wealth will sprout. This is normal. However, the education field has the strongest growth in the world. In fact, it is one of the most expensive services. Yet, the desire for a formal education never dies.
In America, it is more obvious than before. Nowadays, many companies prefer to hire people who have at least a college or university degree. This need fuels more quality institutions of higher learning. As a result, the cost of education shoots through the roof. And yet many young men and women ignore the pain of paying for it. The perception is that, it's the only way to job security. No pain no gain sort of.
We know that the Congress is still debating for more budgets for education. No doubt. But nothing concrete yet.
So, where do people go to finance their college education?
The apparent way - student loan.
Just a word of caution for you. If you're looking for financial aid, DO NOT RUSH. The truth is, money is everywhere so are the sharks. Money lending can be a murky area. One clumsy step into it and that's it! Instead of having the money, you end up becoming the slave of it.
That's the purpose of this article - To help you understand different kinds of loan. And offer you proper direction so that you won't get into trouble.
Let's begin...
Federal Loans:
The government of U.S.A. believes that every American citizen has the right to education. That's why the private sector is not the only place people seek student loans.
The federal loan programs are less stringent. And the interest rate is lower than the private loans.
The first thing you should do is to fill up this form -- Free Application for Federal Student Aid, or FASFA, for short. This is printed by Department of Education. Within a few days, you'll receive a confirmation letter of which programs you're eligible for. The process is free and simple.
Once you've the information, contact the Financial Aid office at the college you want to attend. You'll be given all information on different kinds of loan program.
* The federal Stafford loan is the most popular type. It's a fixed-rate, low-interest loan. The rate is usually 6.8%. This is available for undergraduates. It has many flexible repayment schemes. Loan consolidation is one of them.
* The federal Perkins loan is for students who need large amount of money. The interest rate is 5%.
* The federal parent plus loan is for the parents who want money for their children's education. The parent could borrow full cost of education. But the amount has to be deducted if the student also has received other loans.
The interest rate is 8.5%. There's many repayment options. A credit check is required, by the way.
* The federal graduate plus loan is for students who want to go to graduate school. They cannot apply it if they're still on Stafford loan. Interest rate is still 8.5%. But you can work with organizations such as Sally Mae to get a reduced rate of 6.75%.
Clever Tips:
If your study loan is funded by the government, it is possible that you can pay if off through the loan forgiveness program. Of course, don't expect it to happen without giving any valid reason!Once the government approves your application, you need to sign an agreement with them. Usually, the loan forgiveness is carried out by doing community service for a specific period. Some may be called on to serve as a primary or secondary school teacher. Some may have to serve in the armed forces or law enforcement. After completion, your entire loan is forgiven.Loan forgiveness program is one viable solution. You're able to repay loans in short time, and earn enough money to have a decent lifestyle after graduation.
College And University Grants:
Most colleges and universities have their own grants for student. The amount is usually based on many factors such as financial need, grades, merit or program of study. It's similar to scholarship.
You need to check with the college or university for more information.
Private Loans:
If the government shuts the door for your loan application, you still have one route to go. Many private lending institutions will be happy to lend you the money.
However, that doesn't come with a price. Many of the private lending rates are on the expensive side. So, think carefully before you opt for this.
The popular choice is signature student loan. You must be in good academic standing to be eligible for it. There's no loan limit. So, you can either borrow the entire cost of study. If you work for Sally Mae, you'll get a lower interest rate.
The next one is student answer loan. Student can borrow from $4,000 to $40,000 for any expenses for the study.
In Conclusion...
The money is really everywhere. But let's recap - do not get into trouble repaying for it.
Personally, I think this is the wisest move you can take (in chronological order) -
1. Try to get as many college or university grants as possible.
2. Opt for federal loans if allowed.
3. Opt for federal loan consolidation program to reduce your financial burden.
4. When nothing works out to repay the loan, apply for loan forgiveness program.
The private loan is not the recommended option. Because of the high price and strict rule that you've to take care of. However, it's still an option if you can afford to repay it.
Erik Wongsor is a part-time freelance writer working at full-time speed. He has ghost-written for over 200 clients. And he discovered the easiest way to transfer the mind of the market demand into hot selling articles. He is always available for consultation through his e-mail at erikwongsor@gmail.com Talk to him and find the reasons to hire him!
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