Getting Direct Student Loan

Author: Sally Croft

Direct Student Loan program is the initiative of US Department of Education. Mainly referred to as the Federal Direct Loan Program (FDLP), the program offers financial aid and assistance to students willing to pursue their educational goals. The loans are offered to courses taken up after high school education.

What are Direct Student Loan?

The so called ‘Direct Loans’ are directly issued by the Department of Education to students satisfying the needs of grant provided they are in line with the terms under which the educational institution of their choice is listed with them . The terms of loan are extremely beneficial to students looking forward for low cost loans.

These direct loans are often need based loans offered to students. You must be aware of both subsidized and unsubsidized loans offered to students by government agencies. While subsidized loans are those where the interest cost of the loan is borne by the government, unsubsidized loans are otherwise called guaranteed loans also offered by private lenders under the pretext that these loans are guaranteed by government agencies on behalf of the students.

The credit score or credit rating of the student is of no relevance to direct loan programs as the issue of loans are no way related to credibility of the student, instead subject to the information disclosed in the FAFSA application form, the financial condition of the student is clearly recognized and accordingly the loan is granted.

Choice of Direct Student Loan Program

Federal loans are offered to students to meet their educational expenses. They are either directly issued to students from the Department of Education and through all other government and private agencies. It is the US Department of Education that provides the funding for all federal loan programs.

The amount of funding offered are same in terms of the amount offered both for direct Stafford and PLUS loans and those Stafford and PLUS student loan programs offered through FFELP (Federal Family Education Loan Program)

Both origination and consolidation are offered under the Federal Direct Loan Program (FDLP). Educational institutions are open to participate in either FDLP or FFELP. Again, it is important to note here that while students are directly offered the loan, they are not allowed to choose FDLP where the school of their education chooses FFELP. In other words, they are allowed to choose a program in line with their school’s choice. The same condition does not hold good for consolidation loan option under FDLP or FFELP.

Under the new Obama Government, origination loans are being brought under the complete control of direct loan programs, highly benefitting the government’s treasury.
Have you been granted any student loan under the direct loan program, if yes please discuss the procedure and your experience.

Tags: Direct Student Loan, federal loan, student loan
Posted in Direct PLUS Loan, Federal School Loan, Student Loan | 2 Comments »

Jul

Student Loan Rates Will Drop to All Time Low - Take Advantage of it!

Author: Sally Croft

This is good news. How I was waiting for this! Any saving really matters to me. How about you? Don’t you think reduction in interest rates are surely going to help you get the best deal ever? The answer is yes.

Student Loan Rates

The best of deals come with very low interest rates. It is the rate of interest which decides the cost of borrowing; the lower it is the lesser will be your liability. Hence students normally tend to go for those loan options which offer the least of interest rate cost.

Student Loan Rates Will Drop to All Time Low

It is the happiest of news to all those who have student loan liabilities. Kindly note, that on the first of July, interest rates on Federal Stafford Loans and Federal PLUS loans are going to drop to an all time low. Are you eager to know what the new rates are going to look like well, have look below.

The rate is at 2% for all Stafford Loans in the status of in-school and grace period.
For those Stafford Loans in repayment the rate is expected to be fixed at 2.50%
Federal PLUS loans offered to the parents of the students taking up the course of study will be at 3%

The situation is some what similar to the rates say some 5 years back when the consolidation rates where around 2.77%. Hence for all those who failed to consolidate few years back it is great news.

These Federal Direct Loans can be consolidated with interest rates on borrowing locked in. A lock in facility helps you fix the interest rate at a particular percentage and which does not change with the change in market condition as far as your deal is concerned. Please to remember that you benefit the maximum only if have Student Loan which was borrowed much before July 1, 2006. In order to be clear about the benefits you are bound to get due to the newly revised interest rates it is important that you read through the entire notification once it is issued. Other wise you are sure to end up in misconceptions about the new rates.

Cap on Students Loan

Friends! Also be aware of the fact that on the 1st of July this year the College Cost Reduction and Access Act (CCRAA) initiates a change, according to which the law will cap the student loans at 15% of the adjusted gross income of the individuals intending to borrow money. As far as the loan forgiveness is concerned, the student loan liabilities of those individuals who are in public service for a period of 10 years are completely dropped. These interesting changes are to come up on the 1st of July this year. What we have mentioned in this article is just a highlight of the possibilities, please read through the final version of it once it is passed.

You can always feel free to post, any latest information, updates and details on this topic. Make it the most happening place on the web !!

Tags: College Cost Reduction, Federal Direct Loans, Federal PLUS loans, Federal Stafford Loans, Stafford Loans
Posted in Direct PLUS Loan, Federal School Loan, Financial Advice, Student Loan | 2 Comments »

Jan

What relief will year 2009 bring for PLUS Loans pursuers?

Author: Sally Croft

Who can use PLUS Loan:

Out of the many loan options available to students to fund their college education, PLUS Loans are offered to both students and parents of students pursuing their graduation is one of the most sought after option. These PLUS loan options are guaranteed by the government and fall under the direct supervision of the US Department of Education. They are also called Federal PLUS Loans.

These loans normally cover books, tuition and other fees, books, supplies and transportation. The maximum amount of loan is the amount of loan required less financial aid if any required.

Benefits of opting for PLUS Loan:

PLUS loans come with a number of benefits. One can apply for a PLUS at any time during a year, you can apply for this loan irrespective of your level of income, and this loan comes with no collateral security requirement. Credit check is a basic requirement for this loan. You can repay the loan earlier without any penalty clause and discount on interest rates offered for on time payments.

PLUS Loan borrower benefits in 2009:

For a parent borrower under the Parent PLUS loans, the first payment of a PLUS loan installment is generally due within 60 days from the date of final loan disbursement. But a parent can defer payments on a PLUS loan while enrolled in school on a half-time basis. The relief in year 2009 is that, for a PLUS loan first disbursed on or after July 1, 2008, a parent, upon his or her request, can defer payments on a PLUS loan for the 6-month period after the parent drops below half time and while the student on behalf of whom the parent has borrowed is enrolled at least for half the time and for the 6-month period after the student drops below half the time as required. A graduate or a professional student borrower can defer payments on Grad PLUS loans while enrolled in school for at least on a half-time basis. The relief is that, the student can for a Grad PLUS loan first disbursed on or after July 1, 2008, defers payments on Grad PLUS loans for the first 6 months after the student drops below half the time.

For all loans disbursed between July 2008 and June 2009 the interest rate is fixed at 6% and all loans issued between July 2009 and June 2010 the rate is fixed at 5.6%. Any PLUS loan taken at this point in time is highly beneficial.

So friends what are your waiting for…, this maybe your right time to take the ultimate decision on Student Loan.

Good Luck & Happy Learning