myfi-space
how to get federal loans to pay for college and things you should know about having them in the first place
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i put a pretty flower background so i can hopefully destress y'all as you read this stressful topic <3
-nev
to start, we have to discuss the different types of loans we teens can actually get. there are four types of federal loans we can get from the government: direct subsidized loans, direct unsubsidized loans, direct PLUS loans, and direct consolidation loans.
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direct subsidized loans are loans for undergraduate students who demonstrate financial need for help to cover the costs of higher education. financial need is the cost of attendance of a school minus your expected family contribution. there isn’t necessarily a cap to how low your family’s expected family contribution can be to attain this loan, but it’ll be somewhat obvious that you don’t qualify for one if “J.K. Simmons is [your] neighbor.”
to apply for all of these loans, first make sure you or *hopefully* your parents have filled out and submitted the FAFSA form. literally almost every college requires FAFSA for the application process in the first place, so you’re most likely already set for this step. based on the results of your FAFSA form, your college or career schools will send you a financial aid package that may or may not include a federal student loan. if you do receive a federal student loan, your school will tell you how to accept all or part of that loan.
there are some things about loans that are super important which you guys absolutely need to know and remember when you finally start applying for and paying them. keep track of how much you’re borrowing; think about how much that money will affect your finances in the future, and how much you can actually afford to pay back. look at starting salaries in the field you choose to see how much you will likely earn after college.
thinking about paying for college can be really stressful as a teen. we all know some of the top colleges have tuitions of up to 70k each year, and money doesn’t come from trees (as adults always say)! unless your parents are paying for a full ride, you’ve been saving some big bucks for a long time by yourself, or you finally gain access to your father’s inheritance in his will like hilary duff in a cinderella story, you’ll probably have to get a loan to pay off your college tuition.
direct unsubsidized loans are loans made eligible to undergraduate, graduate, and professional students without its eligibility being based on financial need. these are probably the most popular loans taken out since they are the most available to everyone. think of the quantity of these like shein and the other loans like versace, except ignore the implications of wealth behind each brand. essentially, there are more direct unsubsidized loans to go around so a lot more people have them. the money received from these loans can range from $5,500 to $12,500 per year.
to eventually receive all this money, you have to complete entrance counseling, which is kind of like therapy except instead of learning how to manage your life and emotions, you’re specifically taught about the responsibilities and obligations that come with actually paying back your loan. you also need to sign a master promissory note, which sounds super fancy but is really just agreeing to the terms of your loan in the same way you say you accept the terms in conditions to every website and app ever (but you can’t just agree without reading them this time)!! always contact the financial aid office at whatever school you’re going to though, so you know the process unique to your school.
understand the terms of your loan and keep copies of your documents for the loan. when you sign the promissory note mentioned earlier, no matter what happens with your schooling or career, you cannot escape the terms of that note. try the hardest you possibly can to make your payments on time. finally, keep in touch with your loan servicer; notify them when you graduate, drop out, transfer, or change your name, address, or social security number. if you’re having trouble making your scheduled loan payments? contact your servicer immediately. they have options for you to help you still have a good standing with your loan.
have a great day guys don't overstress :) you've still got plenty of time
sources:
https://studentaid.gov/understand-aid/types/loans/subsidized-unsubsidized
https://studentaid.gov/understand-aid/types/loans
the u.s. department of education’s federal student loan program is the direct loan program (you must be enrolled in a school that participates in the direct loan program so look it up for whatever school you end up at or want to attend). there are loans called private loans, but those are less likely to be the loans you guys are going to get because many of them involve building up credit to be permitted the loan, and teens don’t typically have an established credit history. because of this, we’ll be talking about federal loans, which are loans that the u.s. department of education gives under its william d. ford federal direct loan program.
direct PLUS loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. a credit check is required, and borrowers who have a not-so-great credit history have to meet additional requirements to qualify.
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lastly, direct consolidation loans allow you to combine all your eligible federal student loans into a single loan with a single loan servicer. a loan servicer is a company that collects payments, responds to customer service inquiries, and performs other administrative tasks associated with maintaining a federal student loan on behalf of a lender.
there are benefits to getting federal loans over other methods of paying for college. for one, the interest rate on them is fixed and usually lower than private loans and credit cards. these are also much more accessible since you don’t need a credit check or cosigner to get most federal student loans. you don’t even have to start paying these loans off until after you leave college and when you start paying them, there are flexible repayment options to postpone your loan payments if you have any trouble.
i know this article could have stressed you out even more about college and paying for it. i’m already stressed out reading over my work and visiting the websites that talk about it. it’s so scary to think that soon all of us will be forced to be doing these adult things when we still feel like kids. but i know that in the end, all of you guys and i will get the hang of it and it’ll be as easy as stealing the declaration of independence (which is to say not easy at all, but doable if nicholas cage can).