Consolidating credit card debt with student loans

In addition to grants and other financial aid, the U. Federal Government administers a program of Direct Student Loans that does not require a long history of pristine credit.

Traditionally these loans were guaranteed by the government and issued by private lenders, but today the loans come directly from Uncle Sam - without formal credit checks.

Applicants for federal aid do so as ‘dependant’ or ‘independent’ students, which is determined by whether or not parental information is included on the FAFSA.

Independent students enjoy higher borrowing limits. As of July 1, 2012 Direct Loan maximum borrowing limits range from ,500 to ,500 annually, depending on your individual situation.

For Direct Subsidized Loans issued after July 1, 2012, interest will not be paid by the government during the 6-month grace period after you leave school.

If the interest is not paid by the borrower, it will be added to the principle balance of the loan.

Typically, families with annual incomes below ,000 are eligible for relief under the Perkins Loan program.

The form uses information about your family’s financial situation to determine your Expected Family Contribution (EFC).Filing your FAFSA gets the ball rolling to help you pay for college.Grants and loans are essential components of most student aid packages.By all means, put your best foot forward by exhibiting responsible fiscal behavior, but don’t expect banks and credit unions to lend to you without a significant history of positive credit outcomes.In times of need, college students can be forced into high-risk loans that carry hard to manage interest rates.

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