Government Student Loans
Government student loans are financial aid that is given directly to the student or the student’s parents from the government provider, without the use of an alternative lender. This money can be used to pay for undergraduate, graduate and some varieties of vocational education.
The Stafford Loan and the PLUS loan are two varieties of government student loans. The Stafford loan can either be subsidized or unsubsidized. The PLUS loans are for graduate students or for the parents of students. Government consolidation loans are also available.
The Stafford subsidized loans are issued based on your need and you must be at least a half-time student to qualify for this form of loan. Your interest and payments are postponed until six months after you depart school. The unsubsidized loan has interest charged on it from the beginning when it is issued and it is not need based.
PLUS loans are to help graduate students and the parents of dependent students meet the financial obligations of their college education and all of these types of financial aid can be consolidated through a government student loan program.
In order to submit an application for a government student loan you must first complete the Free Application for Federal Student Aid (FAFSA) form. This document is long and I have discovered that it was best to fill it out online. You do not have to complete it all at once. You can save it and complete it at a different time. You will need to request a PIN number in the beginning and that PIN will stay with you throughout your college years. You will need to sign a Master Promissory Note (MPN) before the loan will be paid out. The MPN is a contract that explains the terms of the loan.
The total of Stafford loan amounts that will be issued are as follows:
• $23,000 for a dependent undergraduate student
• $46,000 for an independent undergraduate student (no more than $23,000 may be subsidized)
• $138,500 for a graduate or professional student (no more than $65,000 may be subsidized; includes loans for undergraduate courses)
The PLUS loan does not have a designated financial amount. You can borrow up to the cost of your education, minus any other financial aid you have received.
Stafford loans being paid out at the current time have a fixed interest rate of 6.8% and the government PLUS loan has a fixed rate of 7.9%
If you need a student loan, the government student loans are going to be your best bet, but you may not be able to get a sufficient amount to complete your course study. There are other means and other varieties of financial aid that can be acquired to cover the rest of your educational expenses.
