Federal loans
Whether you call them federal loans or government loans they all mean the same thing, you are looking for loans to go to college or university. When you are looking for student loans you should really look at
government loans first as they generally carry a lower interest rate than any loan you can get from your bank or credit union.
You will often here a federal direct plus loan discussed when you are talking about federal college loans , these are loans that are actually taken out by a parent rather than by a student. This is a kind of loan of last
resort as parents generally have enough debt to deal with already from mortgages, car loans and all the other day to day bills without thinking about taking on any more federal loans.
As the price of college keeps rising along with (although faster than) the cost of living there are more and more chances to borrow money and this often seems to be the first thing that students look into “How much of a loan for college can I get?”. What people seem to be forgetting is the millions of dollars of federal grants that are available.
As my dad always used to say “The problem with loans is that they need to be paid back” even if you get one of the federal personal loans at low interest you still have to pay the money back. If you can get grants then you don’t need to pay them back. Just because you can borrow money at a cheap rate it doesn’t mean you should, when you are young you think you will be walking straight out of college into a job that pays more money than you could possibly need. The harsh reality of life is that while you may get a job it won’t be much more than you need to survive on at first so paying off any money you borrow can be a lot harder than you would hope.
When you begin to look for federal loans do not pay anyone to help you fill in any forms or do anything else saying they can guarantee you will get a loan with their help. All applicants have to fill in the same data and it is all checked with the same criteria. There are plenty of unscrupulous companies that will prey on the desperation of kids who really need to get money together so they can start , or finish, school.
Your years at college are just the start of your financial future don’t take on debt that is going to sit around your neck like a massive weight far into your adult life. You will have plenty of chances to spend money on exotic holidays and new computers when you are older you really will survive without that spring break trip to somewhere sunny.
Learning to control your spending and your accumulation of debt will serve you well throughout your life and there is no better time to start than when you are earning the least you probably ever will. The primary rules for the college years should be have fun, get a good education and don’t go crazy with the federal loans.