Last Updated on December 15, 2022
How Do I Get Student Loans?
If you’re like most people, your student loan situation is probably a little complicated. If you were lucky enough to get into a top school, chances are your family doesn’t have the money to pay for it. You might be eligible for financial aid, but the problem is that the government gives loans out in installments rather than all at once—and some of those installments can be pretty big. It’s difficult to manage them on your own, especially if you’re just starting out in life and don’t have much experience managing money yet.
That’s where we come in! We’re here to help students like you take control of their loans and make sure they get paid off faster than they ever thought possible.
How Do I Get Student Loans
what are the 4 types of student loans
Federal student loans make up the vast majority of student loans in the U.S. They are made by the federal government with the U.S. Department of Education acting as the lender, and they typically have better benefits and terms than private student loans. However, these benefits and terms can vary greatly by loan type, so it’s important to become familiar with those that you may be eligible to borrow before you sign on the dotted line.
Keep in mind that all student loans, including federal loans, are money that you are borrowing to pay for school and must pay back with interest. Before borrowing student loans to cover the cost of college or postsecondary training, consider your options carefully and do your best to reduce the amount that you have to borrow. Always explore and apply for scholarships and accept any grant aid or work-study options that you are offered before looking at loans.
To apply for federal student loans and other types of federal student aid, you must complete the Free Application for Federal Student Aid, or FAFSA, each year. You can do this online at FAFSA.com or in the myStudentAid mobile app.
There are four types of federal student loans available:
- Direct subsidized loans
- Direct unsubsidized loans
- Direct PLUS loans
- Direct consolidation loans
Direct Subsidized Loans
Direct subsidized loans are available to eligible undergraduate students with demonstrated financial need. Your financial need is determined using a formula with the information provided on the FAFSA.
If you qualify, this loan has slightly better terms that other federal loans because the federal government will cover the interest during certain periods, including while you are enrolled in school at least half time, during the six-month grace period after you leave school and during periods of deferment.
The current interest rate on direct subsidized loans is 2.75%, which is fixed over the life of the loan. There is an origination fee, which is 1.057% for loans made after Oct. 1, 2020, and before Oct. 1, 2021.
A credit check is not required, but there are limits on the amount in unsubsidized loans that you are eligible to receive each academic year and in total. The limits depend on your year in school and whether you are a dependent or independent student, which is based on information you supplied on the FAFSA.
These loans are eligible for all the key benefits of the federal loan program that are designed to protect you as a borrower. You do not have to repay them while you are enrolled in school at least half time and during a six-month grace period after leaving school. Direct subsidized loans are eligible for several repayment plans that are designed to help you through periods of financial distress, as well as loan forgiveness programs like Public Service Loan Forgiveness, or PSLF, under certain conditions.
Direct Unsubsidized Loans
Direct unsubsidized loans are similar to subsidized loans with some key differences. Most significantly, the unsubsidized loan borrower is responsible for the interest that accrues during all periods, even when the loan is not in active repayment. Also, unsubsidized loans are available to both undergraduate and graduate students, and eligibility is not based on financial need.
