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Student Loan
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Article on Student Loan
The cost of higher education is often a problem for anyone wishing to further their studies, however there are various methods available to help fund this important part of an aspiring professional´s life. One option among many is a student loan.
Students should apply for the Federal government’s version using the FAFSA, the online student aid form that will return an outline of funding to help the student pay for their schooling. Not all students qualify for grants or scholarships, and even if they do – these often won’t cover the full cost of school. A student loan is a great option and can also be used to combine with any grants or scholarships that have been awarded.
Beyond the FAFSA
There are many other sources for student loans other than the Federal government. Students and/ or their parents can apply directly to the school in some cases. Some colleges have payment plans to help students attend their school. The school financial aid office can point the student in the right direction for possible outside loan sources as well. Private banks also offer student loans, and the qualifications are often less stringent to qualify for this type of loan than for example a car or personal loan. Generally student loans, no matter the source, carry a much lower interest rate than a loan for any other purpose. In addition, the repayment does not generally begin until after graduation.
Start Early
Deadlines to apply for student loans and other forms of aid begin very early. Sometimes the aid application deadlines come before the admission decision from the school. Missing a deadline for forms is a sad reason to miss out on money for school. Make sure all forms are turned in on time and completely filled out. If there are any blanks on the form or missing documentation like tax returns or bank statements or the birth certificate, for example, there will be a delay. That delay could cause the aid to be declined. The student should not assume that all schools require the same documentation.
Loan Forgiveness
If a student happens to be pursuing an education in nursing, or studying to be a doctor or teacher, they may be able to skip those loan payments altogether, even after graduation. The government has a program of loan forgiveness which erases part or all of the student loan balance if the student agrees to work at a medical facility that is in a disadvantaged area as deemed by the government. Usually the student must work at these jobs for an equal number of years as they attended school using Federal loans. The forgiven amount is capped at $50,000. Search ‘loan forgiveness programs’ online for more details and additional programs.
Other Loan Advantages
The student receiving loans for school (or their parents) can often deduct any interest paid during the year from their income taxes. Some students or parents may use a home equity loan as part of the education financing process. Home equity loans generally have their own tax advantages as well. Tax advisors and the IRS have more information on these situations. Perhaps the biggest advantage to student loans is that with less worry about ‘the money part’ of schooling, students can concentrate their energies the education part.
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