All About Student Loan You Should Know(2)
U.S. loans uarlier than 2010 included direct loans (directly initiated and financed by the U.S. Department of Education) and secured loans (initiated and financed by private investors, but guaranteed by the federal government). The latter is thought to have profited from private student loan companies with taxpayers' money, but was unable to save students money. As a result, secured loans have been replaced by direct loans since 2010. These loans are used for colleges and universities, including funds directly to schools and grants for personal and family resources, scholarships, bursaries, and hard-working students. They may come from U.S. government funding, or they may come from financial subsidies.
The U.S. Department of Education has published a booklet that compares private and federal loans. Also in this document, the government describes to you the possible use of loans:
You can use your money only to pay for education other than the school grants. The cost of education includes school fees, such as school fees, food and accommodation, books, supplies, equipment boarding costs, transportation costs and rental of personal computers.
Graduate students with federal student loans have higher restrictions: Staffold offers sponsorships of $8,500 or a subsidy of $12,500 (restrictions apply for certain courses that may differ).
Total Loan Limit spent at Stafford
Students who have a loan through Stafford cannot exceed the total limit of a certain subsidy. For undergraduate students, the maximum limit is $57,500 for loans that include grants and subsidies, and the total amount of any maximum loan does not exceed $23,000. Once the total amount of the grant and subsidy has exceeded the total amount of the loan of the grant and subsidy, the student spent (re)on the loan until they repay the additional Stafford loan fund. The student has repaid this amount and will regain the previous total limit.
Federal loans to parents
Typically, these are additional loans (formerly known as "undergraduate parent loans"). Unlike student loans, parents can borrow much more - usually enough to cover any difference in education costs. However, there is no grace (repayment) period: repayment (requirement) starts immediately.
It is the parents who are responsible for repaying these loans, not the students. Parental loans are not as accountable as students because they are not co-signed loans. Parents sign high-level credit certificates to repay loans, and if they don't repay the loans, parents' credit may be downgraded. In addition, parents should consider a "four-year" repayment period instead of a "year 1" repayment period. It sounds like a "manageable" $200-a-month debt burden that could quickly expand to a more difficult $800 a month if it had been with out loan support for four years. The ability to accumulate debt on instant payments can be expensive.
Under the new law, graduate students can get additional loans under their own names. These additional graduate loans are the same as the parents' additional loan interest rates and terms.
Parents should also be aware that U.S. legislation has significantly raised interest rates on these loans to 8.5 percent on July 1, 2006.
