Educational Loans Basics

If your are living in USA and planning to get yourself equipped with latest education or going to earn some degree or thinking of going to college and you are scared of the financial Burdon attached to it then you are not alone ,a number of young people in USA are facing the same problem. There are number of solution to it and one of them is loan. Frankly speaking I am against loans and the reason is that when someone takes loan then that one is using or capitalizing ones financial cushion, financial freedom and economic comfort of tomorrow but at the same time higher education is important .

Scholarships can be a solution to it although in some of the scholarships one has to fill the bond of employment for some time but believe me its much much batter than taking loan and I recommend of getting hold of some scholarship .So you are the better judge yourself .Think of a loan as last resort. Don’t consider it as the first option.

Now, if you think that you just have last resort then there are few loan options available for you. Every option is different from other and each option’s suitability varies from case to case and individual to individual. So you are the best judge if in doubt get help from others.There are two main types Fedral Education loans and Private Education Loans.

1. Federal Education Loans: These are the loans arranged through the US government.

There are two main types of Federal Education Loans,

a. Federal Family Education Loan Program: Funding to Federal Family Education Loans is given by the private lenders .These private lender include banks, credit unions and various financial organizations. It has its own eligibility and repayment options.

b. William D. Ford Federal Direct Loan Program (commonly known as direct loan Program): Funding to federal direct loans is provided by US government. These funds are distributed through the respective educational institute i.e in case of Federal Education loans government will send the funds to Educational Institute and that institute will distribute it into the students. It has its own eligibility and repayment options.

It is important to note that there are few loans which are given to the parents or guardians of the students.

2. Private Education Loans: These are the loans which are given independently without any involvement of government. There are many non public organizations (banks, big companies) which provide funding to these types of loans but their interest rate can be higher.

There are also different kinds of student loans available depending on your field of study. You can get information from your college accounts departments but while choosing the loan option do consider the loan interest rates and the terms and conditions and remember an option suitable to someone else may not be suitable to you.

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Student loans & Scholarships