John Mailer asked:


After graduating from high school, the next immediate concern that you will have is to get a job or a college degree. If you are planning to go to college, you will need a lot of money to finance your education.

However, not having enough money to pay for your school fees should not be a reason for you not to pursue your dreams of getting a college degree. There are many government institutions that are offering direct student loans to qualified students all over the country. The good thing about a direct student loan is that it is affordable and will only be payable once you have finished college or have left school.

Advantages of Getting Direct Student Loans

Getting a direct student loan has a lot of advantages. First, when you go for a direct student loan, you borrow directly from a government agency such as the Department of Education. Since you will no longer transact with any intermediary institutions such as banks and other lending institutions, you will most likely get lower interest rates.

The second advantage of getting a direct student loan is that you will be able to access your account 24 hours day seven days a week. When your application for a direct student loan is approved, you shall be provided with an account number and a password so that you can access the online portal of the government agency.

If you need information regarding your account, you can just log into the system of that agency using your account number and your password and then you can now get the information that you need.

The third advantage of getting a direct student loan is that it offers you flexible payment system. In most cases, you will be given at least three options to pay for your direct student loan after you graduate from college and find a job. The first option that you have to pay the direct student loan of equal monthly payments for a certain number of years.

The second option is the graduated scheme where you will start to pay in smaller amounts during the first few months after you have graduated but later on the amount of your monthly payments will increase accordingly. Usually, the second option is more appropriate because you cannot really expect to earn big bucks immediately after you graduate from college.

The third option that you have in paying your direct student loan is the income sensitive scheme where your monthly amortization shall be computed according to your income. The third option is favorable to you but sometimes could become a bit complicated if you transfer from one job to another and your income fluctuates.



Posted by Nikhil Gupta

Thomas Erikson asked:


Here are 4 student loan consolidation repayment plans that are available to you for your federal direct student loans.

Consolidating your student loans lowers your monthly payments so they fit your budget. You can choose the option from these 4 that best suits your situation so that your student loan repayment doesn’t become a serious financial burden.

The equal payment option allows you to consolidate your federal direct student loans using equal monthly payments. You receive a fixed interest rate on your loan and then make equal payments until your loan is paid off. The main benefit to you is this is the least expensive option since you pay both interest and principal. The consistency of this option helps – you know how much you pay each month and it won’t change.

If you anticipate needing lower monthly payments for the first couple of years, then a graduated repayment plan may be right for you. You begin by paying lower monthly payments (usually interest only). After a specified period of time (usually 2 to 5 years), your monthly payments are increased to include both interest and principal.

This option is more expensive than the equal payment method because the initial period only covers interest so it takes longer for you to pay off the principal. As a result, you get charged interest for a longer period of time.

If you have an equal payment or graduated repayment plan, you can extend your repayment to 15 years if you qualify. In order to qualify, you need to have an FFEL loan that was disbursed on or after October 7, 1998 and the total amount of FFEL debt you have must be greater than $30,000. By extending your loan repayment, you lower your monthly payments so they can better fit your financial situation.

You need to keep in mind that by extending your repayment, it becomes a more expensive option since you get charged interest for a longer period of time.

If your financial situation just can’t handle the repayment requirements of these options, then another of the student loan consolidation repayment plans is called income sensitive repayment. Your monthly payments are adjusted each year based on your gross annual income. It takes into account your total debts and the size of your family. Your lender requires documentation about your income and debts in order to properly assess your monthly payment level.

No matter what your financial situation is, there is an option for you. These 4 student loan consolidation repayment plans provide you with a wide range of options so you can repay your student loans and have those monthly payments fit your budget.



Posted by Nikhil Gupta