Hi this is Jeff Ehlers with Bills.com. For
many young Americans, going to college is an important step in determining what kind
job and income they will have. College is an exciting time and it’s easy to neglect
the financial costs. Sometimes even students about to graduate may focus more on the benefits
of the education without thinking about how to repay it. There is now over $1 Trillion
in student loan debt in the U.S. that’s even more than is owed in credit card debt.
Approximately two-thirds of all college students graduate with student loans. The rising cost
of college, tuition and living expenses, means that you will need to come up with more funds
to pay for an education. So, you need to develop a sound financial plan that includes paying
back loans you take out. In this video I will focus on the differences between federal and
private student loans. Let’s Start by examining your federal financing
options. Federal Loans are better for the following reasons: First, they’re easier to get, you qualify
without a credit review but your income will determine your mix of federal student loans.
Second, most federal loans don’t require a co-signer so the process is a bit faster.
Third, because the Federal Govt. guarantees the loan, rates are typically lower than P.S.L.’s.
Finally, federal loans have flexible repayment terms with programs including income based
repayment & student loan forgiveness. Currently, all federal student loans are done
through the Direct Loan program. To qualify you must fill out the FAFSA form. I recommend
that you contact your schools financial aid office for more details.
The amount you can borrow in federal student loans is capped therefore you may need to
cover your costs with private student loans. The most important facts about Private Student
Loans are: They’re harder to qualify for; you need
to meet both the lenders credit and income requirements.
P.S.L.’s often require a co-signer and you both are 100% responsible for repaying the
loan. These loans are typically more expensive,
and have higher interest rates. Rates can vary from lender to lender so it
is crucial that you shop around to get the best terms Searching for student Loans can be an overwhelming
process, so. it’s important that you research your options, before you finalize your college
financing plans. Bills.com partners with Private student loan lenders, to make it easy to find
the best rates available. Explore the rest of the web site, too, where
we offer more great tips and information on a variety of financial topics. Thanks for
visiting us here at bills.com where were helping people save money every day!