Education Loan Helped Thousands of Students Reach Their Dreams
Education loan is a program that focuses on assisting and supporting each U.S. student with their educational expenses. It primarily provides financial assistance for eligible students that can be used while they’re pursuing their education goals.
Eligible students can use the financial assistance for tuition, book, living cost, and other educational-related expenses.
The main purpose of these education loans is to help each student with their financial hardships in education. However, financial aid from loan programs requires it to be repaid by its beneficiaries with an interest. But there are education loans that offer forgiveness to students
Various education loans are open in the United States. However, the most common loan programs are the Federal Student Loans that are under the Federal Student Aid (FSA).
Most of the federal student loans in the United States were created and handled by the U.S. federal government together with the U.S. Department of Education.
As compared to private education loans, federal student loans offer a competitive interest among students to ease their financial hardships. Moreover, it prioritizes students that are in post-secondary education and undergraduate students.
According to the statistics released by educationdata.org
, the total amount of student loan debt reaches $1.73 trillion throughout the United States. In addition, 43.2 million borrow an average of $39,351 each for their student loan.
The growth of student loans from the said data is proof that millions of students are experiencing financial hardships in terms of education. Moreover, the pandemic is also the main reason why students continue to struggle financially.
This is the main reason why the federal government created federal student loans, to assess and support every student. As of now, education loans are continuously assisting eligible students with their education.
What are the Available Education Loans?
The Department of Education offers a wide variety of federal student loans
. These types of loans enable students to choose what loan will be appropriate for them.
Moreover, the kinds of loans vary differently from each other in several aspects such as eligibility, benefits, and many more.
List of educational loans
Direct Subsidized Loans
Direct Subsidized Loan is a program that assists individuals that demonstrate financial hardship related to their educational expenses. It prioritizes undergraduate students that are pursuing a degree program. Among the other loans, Direct Subsidized Loan has better terms.
The U.S Department of Education will pay for the loan interest within the following period; while in school at least half-time, 6months after leaving the school or also known as the grace period, and during the period of deferment.
This could be great ease for student borrowers as the loan interest is covered. As of now, the said loan program has a current interest rate of 2.75% fixed over loan life.
Direct Unsubsidized Loans
Direct Unsubsidized Loans is a program aiming to help U.S students with their educational expenses. The said program has some similarities to the Direct Subsidized Loan.
However, the main difference between the two is that the Direct Unsubsidized Loan does not cover the loan interest. This means that the student borrowers will pay for the amount of loan interest.
Moreover, both undergraduate and graduate students are eligible for the said program. Also, the eligibility will not depend on their financial need. Direct Unsubsidized has a higher interest for graduate students of 4.3%.
Direct PLUS Loans
Direct PLUS Loans are also known as Grad PLUS loan provides graduate assistance. It focuses on students who reached the maximum limit for direct subsidized and unsubsidized loans but still need to pay for their balance educational expenses.
The Direct PLUS Loan provides additional and supplemental loans for graduate students. As of now, the said program has fixed 5.3% loan interest.
Direct Consolidation Loans
Direct Consolidation Loans is a program that assists students with multiple federal student loans. With the said program, students can consolidate different federal loans
Students with Direct Consolidation Loans will be able to maintain the stability of their monthly payments as they will not pay multiple student loans. The loan interest for the said program will depend on the total loan that will be consolidated.
How Much Can I Borrow from Education Loans?
The amount of assistance that can be borrowed from education loans of federal student loans may vary depending on the loan type. It will also differ whether the student is an undergraduate, graduate, or professional.
Check the list of possible amounts for education loans under federal student loans.
1. Undergraduate students can borrow from $5,500 to $12,500 per year under Direct Subsidized Loans and Direct Unsubsidized Loans. However, it will still depend on the dependency status that affects your year level. Visit the studentaid official website
for more information.
2. Graduate and professional students can borrow a maximum of $20,500 per year under Direct Unsubsidized Loans. They can also receive benefits from Direct Plus Loans but it will be determined by your school.
How to Apply for Education Loans?
The federal student loan application and eligibility requirements can be done through the Free Application for Federal Student Aid (FAFSA). It is the official form that students need to apply for government educational loans.
With FAFSA, schools can determine whether the students are eligible for educational loans such as Direct Subsidized, Direct Unsubsidized, Direct PLUS, and Direct Consolidation.
FAFSA will also determine the financial need of students applying for federal student loans. The bases that will be computed are household income, student income, and other aspects. Students aiming to have access to federal student loans must finish FAFSA first and the process will be done by the school.