In The Red? Best Federal US Student Loans Programs You MUST Know About (Infographic)

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It’s 2018, and US student loans are becoming a matter of national importance. Initially, student loan programs providing financial aid to students have turned into a source of trouble for borrowers and their families. The Federal Student Aid statistics discloses a shocking amount of debt.

As of today, 44 mln student borrowers owe a total of over $1.48 trillion in student loan debt. Meanwhile, the average cost of education is increasing annually. Most students just can’t keep pace with paying the loans, so the amount of debt is accumulating.

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Key Facts On Student Loan Crisis

  • The Forbes suggest that only 2 in 5 borrowers are likely to default in 5 years. This means that almost 40% of borrowers who enrolled in a college in 2004 may default on their student loans by 2023.
  • The average annual cost to attend a U.S. university in 2017-2018 school year ranges between $11,970 to $46,950. The latter number equals the average yearly cost of private non-profit 4-year education.    
  • 40% of the $1 trillion student loan debt is meant to finance graduate and professional degrees. While 18% of the sum accounts for acquiring Master of Science degrees.
  • Median monthly student loan payment is $203 (for 20-30 year-old borrowers).
  • The number of borrowers under the Public Service Loan Forgiveness program is 739,719.  

Types of Federal Student Loans

At the moment, there is a selection of federal student loans given out to both parents and students. These are subsidized or unsubsidized loans offered by the U.S. Department of Education. Federal loans for college are meant to cover higher education expenses at a 4-year college/university or community college.

The list of eligible educational facilities also includes trade, career, or technical schools.

  • Direct Subsidized Loans and Direct Unsubsidized Loans (Stafford Loans)

To get either of the loans, a student must be enrolled at a school participating in the Direct Loan Program.  The limit of a loan depends on the type of program a student chooses to finance.

For instance, the maximum amount of Direct Subsidized Loan to receive for a 4-year bachelor’s degree program enrollment is six years (150 percent of 4 years = 6 years).

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PLUS Loans

PLUS loans are federal loans used to pay for college or career school. Graduate or professional students and parents of dependent undergraduate students are eligible to receive these loans. It is possible to receive the Direct PLUS Loans from the U.S. Department of Education through schools participating in the Direct Loan Program.

The maximum loan amount is the attendance cost set by the school excluding any other financial aid received. To apply for a PLUS Loan fill out the form on Federal Student Aid website.

  • Federal Perkins Loan Program

Federal Perkins Loan Program (Perkins Loan) are federal loans for students (undergraduate, graduate, and professional) with exceptional financial need. Here’s what you need to know:

  • The loan interest rate is 5%.
  • Only selected schools participate in the Federal Perkins Loan Program.
  • The educational facility is the loan lender. The borrower makes payments directly to the school or the school’s loan servicer.
  • The amount of funds depends on your financial need and the availability of funds.

Private vs. Federal Student Aid: Pros and Cons

There are several major differences between private and federal student loans. For instance, federal student loans offer borrowers significant benefits like fixed interest rates and income-driven repayment plans.

This option allows recalculating the loans in relation to the borrower’s income. Thus, loan repayment is tied to an individual income-driven plan. On the other hand, private student loans don’t have fixed interest rates and are more expensive than federal loans.

ACS Education Services is a progressive federal and private student loans provider. Since January 1, 2017, ACS merged into Conduent Business Services, LLC. Becoming a part of one of the world’s most prominent business process services company adds ACS a lot of credibility.

The student loan servicer is now known as Conduent Education Services, LLC.

Students can apply for loans by submitting the FFEL, CBSL, and Private forms found on the official Conduent website.

The payments can be made using a verified user account. The loan service offers a selection of payment options. It is possible to make one- and recurring payments, pay with a check or money order, etc. Choose an option that fits you the most!

Take a look at the main loan differences provided below:

student-loan-pic

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The education loan market is saturated with both federal and private loan offers. Federal student loans are given to both students and parents. On the contrary to private loans, financed by a plethora of independent loan providers, federal loans are financed by the U.S. Department of Education.

Bottom Line

Also, federal loans have fixed interest rates and are subject to student loan forgiveness programs. One of the benefits of federal student loans is the possibility to repay them under an income-driven repayment plan.

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In The Red? Best Federal US Student Loans Programs You MUST Know About
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In The Red? Best Federal US Student Loans Programs You MUST Know About
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It’s 2018, and US student loans are becoming a matter of national importance. Initially, student loan programs providing financial aid to students have turned into a source of trouble for borrowers and their families. The Federal Student Aid statistics discloses a shocking amount of debt.
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