There are Government controlled loans and private loan company's.
The Government controlled loans are usually better and cheaper.
Federal student loans are better then private because :
The U.S. Department of Education has two federal student loan programs:
The William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Perkins Loan Program.
The Federal Perkins Loan Program is a school-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is lender.
There are four types of Direct Loans available:
The Government controlled loans are usually better and cheaper.
Federal student loans are better then private because :
- The interest rate on federal student loans is almost always lower than that on private loans and much lower than that on a credit card!
- You don’t need a credit check or a cosigner to get most federal student loans.
- You don’t have to begin repaying your federal student loans until after you leave college or drop below half-time.
- If you demonstrate financial need, you can qualify to have the government pay your interest while you are in school.
- Federal student loans offer flexible repayment plans and options to postpone your loan payments if you’re having trouble making payments.
- If you work in certain jobs, you may be eligible to have a portion of your federal student loans forgiven if you meet certain conditions.
The U.S. Department of Education has two federal student loan programs:
The William D. Ford Federal Direct Loan (Direct Loan) Program and the Federal Perkins Loan Program.
The Federal Perkins Loan Program is a school-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is lender.
There are four types of Direct Loans available:
- Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
- Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan.
- 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.
- Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.
Your bill will tell you how much to pay. Your payment (usually made monthly) depends on
- the type of loan
- how much money
- the interest rate
- the repayment plan
This is an example calculation for a college loan.
The standard terms have a 20 year payback plan. The interest rate for government subsidized and government unsubsidized is 4.66%. The interest of all of these loans is monthly.
With the standard plan I reasoned it would take 20 years to pay back. I used the equation A=P(1+r)^t to calculate the interest. I solved this by using A=P(1+r/12)^t*12 . With a $20,000 unsubsidized loan after 4 years of college and 6 month grace period the payback would be $24,656,15 so that would be $4,656,15 more because of interest. Then I put in $24,656.15 into the student loan calculator. It told me that in order to pay this off in 20 years I would have to pay $158.12 a month for 20 years.
I think Student Debt is a dangerous thing , because it creates a two class education society. Loans don't solve or Change the Problem.
A Link.