Top 5 Advantages to Federal Student Loans
If student loans are so bad then why are so many Americans relying on them for their higher education?
The student loan problem is running rampant throughout America. There seems to be no end in sight for borrowers. Whether they are getting ready to take out some loans or you’re entering repayment the weight of student loans is firmly set upon your shoulders. The question remains if student loans are so bad then why are so many Americans relying on them for their higher education?
1. No Credit History Required.
Most loans require you to have a good credit history to take out loans. This is why many first-time loan borrowers entering college look toward student loans to supplement their tuition and living expenses. Filling out a FAFSA for federal student loans is built to be a lot easier than approaching any private loans
2. The Ability to Postpone Payments
The ability to apply for forbearance or deferment really helps out borrowers and is one of the more tangible benefits of federal student loans. If you have federal student loans then you have the right to three years of forbearance. However, if you went the route of private loans you are at the mercy of your lender. Private loans aren’t required to have any form of payment suspension and can have very strict rules.
3. Income-Driven Repayment Plans
Federal loan borrowers have access to many different plans for their repayment. Typically, you start out with a standard repayment plan and if you can’t afford those payments, you have options. There are four different types of income-driven repayment plans. Chances are that one of them is right for your specific needs. Private loans will not have access to varying plans.
4. Consolidation is Available Even with Bad Credit
Often times borrower can find themselves taking out several loans over their college career. Whether they asked for a small loan, to begin with, and outlived that loan or maybe they stayed in school longer than they thought they would. Having multiple loans can be confusing. You could have multiple payment dates and plans. Perhaps you have a high-interest rate and consolidation will help. Consolidating your federal student loans is easy. It doesn’t take your credit score into effect and can be submitted quickly and easily.
5. Student Loan Forgiveness
Student loan forgiveness is very real. The best form of forgiveness is available to borrowers who work in public service. Through the Public Service Loan Forgiveness program if you remain with a job within the public service and make 120 on-time monthly payments under an income-driven repayment plan you will then become eligible for loan forgiveness and the remaining amount of your loan will be forgiven.
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