The cost of attending a public university has skyrocketed in the past twenty years. Many schools attempt to combat this problem with a variety of need-based and academically based scholarships. However, this is rarely enough to cover the expenses for the average low-income student. For those who need additional financial aid, there is the Free Application for Federal School Aid (FAFSA) program. The United States government values the education of its young people; thus, a student loan financial aid program has been implemented to help students and their parents with college expenses. It is important to note that the FAFSA program is only available for students attending or planning to attend a public university. Those who are enrolled in private colleges or universities are not eligible for this type of aid. Students can find the FAFSA forms in their high school guidance counselor's office, their university's financial aid office, or even online. For those students who qualify, the FAFSA application is free and relatively simple to complete. The application will request personal and financial information about the student and his/her parents (if the child is still a dependent). The government does not perform credit checks on either party; however, income tax information from the preceding year is needed to complete the application. After the student loan process has been completed, the student will be notified of their eligibility and (hopefully) offered a financial aid package. The type of student loan financial aid the government can offer varies. Sometimes a student will be eligible for grants that do not have to be paid back. However, most of the aid the government offers comes in the form of federal student loans. These loans are dispersed on a first come, first serve basis, so filing the FAFSA application early is very important. It is also important that students understand that college loans must be repaid. With federal subsidized or unsubsidized student loans, the first monthly payment will be due six months after graduation. Like any other loan, a student loan accrues interest; however, the interest rate is significantly lower than that of a credit card or personal loan. Lower interest rates combined with delayed repayment schedules make federal student loans appealing to many families. It is not uncommon for the Department of Education to offer students an amount of money above the cost of tuition, fees, and textbooks. In this situation, the student can either accept the excess funds or decline them. It is important to remember that the loan amount borrowed is the loan amount to be repaid, so this decision should be considered carefully. Borrowing more money than is actually needed could result in financial hardships once the repayment period begins. There are a few ways that student loan repayment can be deferred after graduation. If the student re-enrolls in school at least half time, the payment will again be deferred until the student is out of school. Students who decide to attend graduate, law, or medical schools often utilize this option. Certain military personnel, teachers or the unemployed may also qualify for deferment. Eligibility for this plan must be determined and approved by the lender. If a student is having financial difficulties and does not qualify for a deferred payment plan, it is important they do not fall behind on their payments. Debt consolidation may be a good solution for anyone having trouble making their student loan payments, or for someone who wants to simplify the process of repaying them. A debt consolidation loan combines various student loan bills into a single, affordable monthly payment. Like the FAFSA program, the loan approval process is not affected by "bad" credit. In addition, the interest rate on a consolidated loan is fixed and usually lower than the variable rate the government offers. This lower interest rate could mean a great deal of savings for the borrower. Also, transferring student loans to a consolidation program can lower monthly payments considerably. For these reasons, consolidating student loans makes good financial sense to a lot of recent graduates. A college education is not cheap, but investing in one can have its advantages in the work place. However, not everyone has the ability to pay cash up front for his or her education. Student loans can be a great way to pay for this otherwise unaffordable experience. Take advantage of this wonderful opportunity, but handle it responsibly, and hopefully, your expensive college education will be worth every penny borrowed on your student loan.
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