Lack of funds could hinder your pursuit for college degree, for that heap of cash necessary for higher studies could be as staggering like an iceberg which sank Titanic. However the financial ship of USA that boasts of an AAA credit rating from Standard & Poor’s is more powerful compared to ill-fated ship, and can bail you out with aid from its treasury that will help you do higher studies. There are two broad types of education loans you can look forward to, the first being Federal loans and the other is Private loans.
It’s estimated that around 60% of U .S. students who carry out studies in colleges and universities opt for the student loan each and every year. But upon obtaining it don’t mistake it with a college scholarship program, as it comes with an ironclad rule that you need to pay back the loan with interest. Whether you dropout from school or university midway holds no water and neither can your filing of bankruptcy protect you from not repaying.
Though it is nothing scary about it, for financial experts estimate the typical month to month loan repayment amount will not be more than 10% of what a student could earn in a month. Consequently, the monthly payments can easily be made without sweating profusely. And you don’t be required to start repaying till you have graduated, though you can hear the interest meter ticking right from the day the loan is approved to you.
Federal Student Loans
Your first stop should be to seek out the government Student loan, which is actually a better option since it is much more flexible in character and has a lesser interest rate compared to private loans from education loan providers or banks. The federal loans could be subsidized which would reduce your monthly payment amount even more.
It is a subsidized Federal student loan that undergraduate can avail, and it is capped at $23,000 per student. There are different repayment options, although you get 10 years to pay off the loan. However the repayment begins six months upon your graduation, or after you drop out below half-time enrollment.
This is the kind of federal loan which is given approval to the parents, and they have the option of getting higher limits compared to what the kids get. But parents are responsible for the repayment and not the students, and when they fail to do so their credit standing would take the beating. Exploring the bright side of it, if they make payments in time they would do favors to their credit ranking and stand greater opportunity for getting qualified for bigger loans in future.
These financing options have their own set of guidelines and are offered by private money lending institutions. These loans could be sanctioned to individual college students or parents and you may get higher loan amount too. Like Federal student loan you don’t have to start making repayments until you have got graduated, but the interest starts immediately when the loan is approved. And the university student must utilize these loans just for study related expenditures only.