There are generally two types of student loans that are funded by the government. The Federal Direct Student Loan Program can take the form of a loan that is given to the parent of the student, or directly to the student.
The other main type of student loan is the Federal Family Education Loan program. These loans are slightly different in that although they are underwritten by the federal government (against the loan not being repaid), they are actually provided by private and public lenders. These can be banks, saving associations and credit companies very often through ACS or Affiliated computer Services.
While taking a study loan you should clear one thing that the amount of your loan does not exceed your needs and you have to repay the loan. Because having loan is an easy task but to pay back is not as easy as they keep growing day by day. Before applying for a student loan, make it clear that you have consumed all the available aids and scholarships.
When you finalize a student loan deal, make all terms and conditions clear and understand all the financial aspects as well. Qualifications for student loans are based on the income of student leaner, in case of an adult learner and on parent’s income if you are dependent on them.
Student loans are not only meant to pay for tuition fee only but also any additional expenses. Student loans will provide for board and room, books, computer and even student travel. Depending on your circumstances the student loans can be extended to fit your requirements.
FFELP Student Loans
The two most common government-sponsored education (FFELP) loans are Stafford loans and PLUS loans. Stafford loans are given to students. The interest rate for Stafford loans is capped at 8.25 percent. There are strict limits on amounts that can be borrowed through this program– loans are limited to $2,625 the first year, $3,500 the second year, and $5,500 the third and fourth years (and fifth year if necessary).