Department of Education School Loans Program
Financing a college education often requires a variety of types of financial aid. You have your gift aid in the form of grants and scholarships. These forms of financial aid do not need to be repaid and are essentially gifts from the provider. You also have your loan aid in the form of federal and private student loans. Private loans require a credit check and can take a while to have approved. Federal loan aid comes from the Department of Education school loans program referred to as the FFEL (Federal Family Education Loan) program. These types of loans are issued, insured and handled by the government through the financial aid programs at colleges and universities.
About the FFEL
The Department of Education school loans program provides student loans through the FFEL program. Students are offered low interest loans that can be subsidized according to need for undergraduate and graduate students. Some FFEL programs will combine the Department of Education school loans program with private companies to provide more benefits to borrowers. Coalitions such as this are dependent upon state and school so you will have to check with your financial aid office to determine what is available in your area.
Applying for Department of Education School Loans
You have to use the FAFSA (free application for student aid) to apply for the Department of Education school loans. The application can be done online or by paper and will enable you to apply for all of the federal aid available to you according to financial need and scholarship. The amount of your loans will be determined by deducting your gift aid amounts from the total cost of your education. You will be given the amount remaining in the form of loans from the Department of Education school loans under the FFEL program.
Repaying Department of Education School Loans
You get the lowest interest rates available on the market when you choose Department of Education school loans. You also get the most flexible repayment schedule and deferment options available for any type of loan. In some cases the interest rate can be reduced to 0% when you have made a certain number of consecutive installment payments (with continued on time payments). You do not need to begin making payments on your student loans until you have completed the program, dropped below half time or dropped out of school altogether. Most payments begin after a grace period of six to nine months (depending on the loan) and can be deferred if you return to school at least half time.
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