Department education consolidating private loans
The average student loan debt for 2016 college graduates who borrowed for college, was ,172 and 70% of the graduates left school owing money.
Private student loans are available, but every expert, even those who work for banks and credit unions, advise students to exhaust all avenues for federal aid first.
Private student loans have some conditions and terms — very good credit or a co-signer needed – that make them difficult.
The interest rates usually are higher than those on federal loans and there are some involved that aren’t part of federal loans.
Stafford and Perkins loans are federal loans given directly to the student.
This type of loan, which is funded with government money, comes with low interest rates and favorable repayment options. They can be consolidated upon graduation, which is an important factor when it comes time for repayment.
The government pays your interest for you while you’re in school.
In total, your undergraduate and graduate Stafford Loans cannot exceed 8,500.There are two types of Stafford Loans: subsidized and unsubsidized.The type helps determine your interest rate and maximum loan amount.If you have an unsubsidized loan, you’re responsible for paying off all the interest.In 2017, interest rates were fixed at 3.76% while you’re in school, but payments are typically deferred — or postponed — until after you graduate. Your annual Stafford Loan limit for unsubsidized loans ranges from ,500 to ,500, depending on your year in school and whether you are claimed as a dependent on someone’s tax return.
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Most go to students whose families’ annual income is less than $50,000.