Your Questions About Student Loans Federal
Mark asks…
How and when do I get money from my federal student loans?
I took out a Federal Direct Student Subsidized Loan, Federal Direct Student Unsubsidized Loan, and the Federal Perkins Loan. I want to use the leftover money (the money not being used to pay for tuition and room and board) for books. When would I get that? Does the school give me a check or something? That’s what I heard they do…
Joe answers:
The school will either give you a check, do direct deposit, or a debit card with your refund on it. The school also controls when they give you the money. Some give out refunds right before school starts (my school sends them out 1 week before classes start so we can get our books), shortly after school starts, after the last drop date, mid semester, or at the end of the semester. Most of the time if the school has no way of you putting your books onto your account they will give out refunds earlier than later..
Linda asks…
What are the differences between federal student loans and loans you get from a bank?
Is there any difference, also is there a difference between a federal loan offered to a student versus a federal loan offered to a parent of a student?
Joe answers:
I used to be a student loan specialist. It is ashame that college students are not educated about this. They only realized the difference till their loans are in default. Trust me it is very difficult to get these loans out of default.
Here is the difference between the two.
Federal Student Loans are backed by the government. With that being said follows different regulations then private loans. Interest rates, as well as certain rights as it relates to forbearance and deferment. No one can force you to pay on your federal student loans, if you do not have a job or means of income. You have a right to forbearance and deferment. Same applies to PLUS Parent Loan for Undergraduate Students, this is a federal loan as well. Every federal loan comes as a result of FAFSA. These loans are very easy to consolidate verses private loans.
As for private loans, this doesn’t come as a result of FAFSA. This comes as a result of your inituitive to meet the complete cost of college. These loans do have forbearance and deferrment rights. Their rights are not the same as if you had a federal loan. Some private loan companies, may require you to pay a fee for deferment, and might limit the amout of times you can request deferment before paying the balance owed. There are penalties associated with private loans. These loans are harder to consolidate than federal loans.
The difference between a federal loan offered to a student versus a federal loan offered to a parent of a student is liability. A federal loan offered to a student is under that student’s name, hence the student’s responsibility to pay for it. As for a federal loan offered to a parent of a student it is the parent total responsibility to pay back the loan, rather than the student.
Chris asks…
Do all eligible federal student loans have to be included when you consolidate?
I consolidated my undergraduate federal student loans a while back fixed @ 3.25%. I now have two seperate graduate student loans (also federal) that I would like to consolidate at a fixed rate so I can pay them off more easily. My undergraduate loan is a higher amount than my graduate loans combined and at a very favorable interest rate. Can I consolidate only my two new loans without including my low interest loan? I would not go through a private company, but rather through “Direct Loans.” Having a singe payment is not my priority, I am looking for a fixed interest rate (preferably the lowest possible).
Joe answers:
Yes, you can consolidate the 2 new loans into one without adding in the other loans.
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