The Student Aid

I am a student like you and getting financial support for college education is  a common problem for us. The primary sources of money for educational expenses are either support from our parents, or financial aid from privately funded or  federally funded student loan programs, or scholarship grants. So continue reading this blog and find out the information for college education financing.

This blog is an informational guide for current college students, working students, and prospective college students on where they could get resources and other information for private and government funded student financial aid. I hope this blog would encourage students and other people to share information and materials on where and how to get financial aid for current or incoming college students.

Types of Student Financial Aid

The main types of student financial aid in the United States are private student loans funded and backed by private banks or lenders, federal student loan programs that are subsidized and guaranteed by the federal government, and scholarship grant programs offered either by the federal government or private businesses or organizations.

A student loan whether it is government or privately funded must be paid back by the student or guarantor, while a scholarship grant would never be repaid. The main disadvantage of a private loan is the high interest rate compared to a federal student loan that has a fixed interest rate.

Private scholarship grants could be obtained from companies, private foundations, and non-government organizations. The federal government offers several grant programs that could be distributed directly to the student.

Steps on How to Avoid Defaulting on Student Loans

In the United States, the defaulting on a student loan is usually described in which the former student or borrower has not made any payments on his student loan for at least 270 days for privately funded student loans, and 270 to 360 days federally funded student loans. There are serious consequences for the borrower if he defaults on his student loan regardless if it is a private student loan or a federal student loan.

Take note that defaulting on a student loan would result in long-term consequences such as the record of your defaulted student loan appearing in your credit history for the up to seven years even after the defaulted loan is paid in full. Therefore, if you are a student planning to apply for a private or federal student loan, or already a current borrower for a student loan, you should know the general steps or guidelines on how to avoid in defaulting on your planned or current student loan. Knowing how to prevent in defaulting on a student loan would spare you from the serious consequences that you would experience.

The basic steps for avoiding a student loan default:

ñ  You should understand the options and responsibilities under the proposed loan agreement or contract. Read and understand the specific terms and conditions of the loan contract.

ñ  Borrow only the amount that you need for your educational expenses. A borrower would usually have a grade period of six months after graduation before the first loan repayment starts so you should take into account the possible income you would earn when you get a job.

ñ  Keep all the documents and other records of your student loan. You should make copies of the loan contract, checks, and other written records related to the loan. Make your repayments on time especially if you have a job with a regular income so you could set aside a part of your monthly income as loan repayments.