Question 1

How do I apply for a Direct Stafford Loan?

Accepted Answer

You need to file the FAFSA (Free Application for Federal Student Aid) before you can take out federal student loans, including Direct Loans (sometimes called Stafford Loans) and Perkins Loans.

Question 2

What is the average amount of a student loan?

Accepted Answer

The average federal loan debt outstanding is $28,973 per borrower, as of June 30, 2015.

Question 3

What are the benefits of federal student loan consolidation?

Accepted Answer

Federal consolidation loans allow borrowers to combine several federal student loans into one loan to streamline loan repayment. The monthly payment amount may decrease because repayment can be spread over a longer time period. Because there are no penalties for prepaying the loan in full or in part, borrowers may make larger monthly payments or extra payments if they wish. Borrowers may also change repayment plans at least once a year.

Question 4

What are the credit requirements for Grad PLUS loans?

Accepted Answer

The borrower of a Grad PLUS Loan must not have an adverse credit history. An adverse credit history is defined as being 90 or more days delinquent on any debt, or having a credit report that shows default, bankruptcy discharge, foreclosure, repossession, tax lien, wage garnishment, or write-off of a federal student loan debt during the five years preceding the date of the credit report.

Question 5

What's the difference between scholarships and grants?

Accepted Answer

Both scholarships and grants are forms of gift aid, which is money for college that does not need to be earned or repaid. Although people often use the terms scholarships and grants as synonyms or interchangeably, there are important differences.

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Question 6

Are there any repayment discounts for private consolidation loans?

Accepted Answer

Some lenders provide auto-debit discounts for making automatic monthly payments by direct debit from a bank account. Typical discounts include an interest rate reduction of 0.25% or 0.50%.

Question 7

What should I do if I filed the FAFSA, but got no aid?

Accepted Answer

Some students will file the FAFSA, but won’t qualify for need-based student aid such as grants, scholarships that require financial need, and subsidized federal student loans. For example, more than half of undergraduate students who file the FAFSA don’t qualify for a Federal Pell Grant or other federal grants. But you do have options if you didn’t receive any need-based aid.

Question 8

How to Pay for Grad School

Accepted Answer

To qualify for federal, state, and college financial aid for graduate school, you have to submit the FAFSA (Free Application for Federal Student Aid). The FAFSA is required to receive federal and state grants and scholarships, as well as federal student loans, including Perkins Loans, Direct Unsubsidized Loans, and Grad PLUS Loans.

Question 9

How Do Student Loans Work?

Accepted Answer

Most college students will have to borrow one or more student loans before they graduate, because there aren’t enough government grants to cover all college costs. There are more than $100 billion in new student loans made each year and more than $1 trillion in student loan debt outstanding.

Question 10

How late can I apply for a student loan?

Accepted Answer

Students can apply for a federal student loan and parents for a Federal Parent PLUS loan up until the last day of classes or June 30 of the academic year, whichever comes first. However, the student must have already filed the Free Application for Federal Student Aid (FAFSA) and the college financial aid office must have received a valid output document, such as a Student Aid Report (SAR) or Institutional Student Information Record (ISIR).

Question 11

How long does it take to get a student loan?

Accepted Answer

There are two aspects to this question: How long does it take to apply for and be approved for a student loan? Once approved, how long does it take for you to get your student loan money? The answers may differ by lender and by the type of loan (federal vs. private).

Question 12

How long does it take to repay a student loan?

Accepted Answer

The standard repayment term on a federal student loan is 10 years. The repayment term on private student loans vary from 5 years to 15 years.

Question 13

How do I find a creditworthy cosigner for my private student loan?

Accepted Answer

Most private student loans require a creditworthy cosigner. Borrowers may need a cosigner if they have bad credit or if they have a thin or non-existent credit history. Even when the borrower has very good credit, adding a cosigner can lead to a lower interest rate and higher loan limits. More than 90% of private student loans for undergraduate students and more than 75% of private student loans for graduate and professional school students are made with creditworthy cosigners.

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Question 14

How can I lower my student loan payments?

Accepted Answer

Student loan payments can be a source of financial stress for many borrowers who are struggling to repay their loans. Every dollar of loan payments is a dollar less that is available for other priorities. So, borrowers sometimes seek to lower their monthly student loan payments.

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Question 15

What should I do if my parents refuse to file the FAFSA?

Accepted Answer

Parents are sometimes unwilling to submit the Free Application for Federal Student Aid (FAFSA) and/or other financial aid forms. But, parental information is required on the FAFSA of a dependent student, so a dependent student will not be able to qualify for need-based federal student aid without his or her parent’s help. There are many reasons why a parent may be unwilling to complete the FAFSA.

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Question 16

Are there student loan prepayment penalties?

Accepted Answer

There are no prepayment penalties on federal student loans or private student loans. You can make extra payments on your student loans or pay them off in-full without paying a fee or other penalty.

Question 17

How long is the repayment term for private consolidation loans?

Accepted Answer

The length of the repayment term varies by lender, typically 15, 20 or 25 years. Lenders offering fixed interest rates may have shorter repayment terms. The repayment term may depend on the amount borrowed.

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Question 18

Are there really scholarships for twins?

Accepted Answer

Yes, there are several scholarships available for twins and other multiples, especially identical twins and triplets.

Question 19

Are there scholarships for students with red hair?

Accepted Answer

There is one scholarship for students with natural red hair color, ScholarshipRed. ScholarshipRed offers one $500 scholarship for redheads each year. The scholarship is open to high school juniors and seniors who have natural red hair color, reside in the U.S. and have a high school GPA of at least 2.5 on a 4.0 scale.

Question 20

Student Loans for Living Expenses

Accepted Answer

Student loans may be used to pay for anything included in the college’s published cost of attendance. The cost of attendance includes not just tuition and fees, but also living expenses, such as room and board, transportation to and from school, and books and supplies. In addition, the college’s financial aid administrator can increase the cost of attendance on a case-by-case basis to cover childcare costs for dependents and the cost of a computer and software.

Question 21

How do I find student loans if I don't have a creditworthy cosigner?

Accepted Answer

Most new private student loans require the borrower to have a creditworthy cosigner. This includes more than 90% of new private student loans to undergraduate students and more than 75% of new private student loans to graduate and professional students. But, what if the student doesn’t have a creditworthy cosigner?

Question 22

Are there subsidized loans for graduate students?

Accepted Answer

The subsidized Federal Stafford Loan is no longer available to graduate and professional school students. As of July 1, 2012, graduate students and professional school students are eligible only for the unsubsidized Federal Stafford loan. Undergraduate students remain eligible for new subsidized Federal Stafford loans.

Question 23

Subsidized vs Unsubsidized Loans

Accepted Answer

The main difference between subsidized loans and unsubsidized loans is that the federal government pays the interest on subsidized loans while you are in school at least half time, during the grace period, and during periods of authorized deferment. This makes subsidized loans a less-expensive option.

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