Federal Student Loan Program

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The Federal Student Loan Program vs. a Private Loan Program

Getting ready for college can be tough, but finding the money to pay for it can be mind boggling. How do you know what type of loan program to go with and which will be the best for your future? There are a few things you should know before deciding between the federal student loan program and a private loan program

Federal student loan program

The first thing you should educate yourself in before deciding on a loan program is the federal student loan program. The number one advantage to this program is that they offer some loans that are subsidized which results in a lower cost to you. The other advantage is that their program is linked directly with other programs such as grants and work study which are other very useful ways to get money to go to school.

Private Loan program

A private loan program, unlike the federal student loan program is not backed by the federal government. However, there are some advantages to a private loan such as higher limits to help get the money you really need for school, not just what the federal government tells you what you need. Although interest rates may be slightly higher, they are still very low and worth the few dollars extra you will pay for them.

How do I choose?

The best recommendation is to first get a loan through the federal student loan program. Regardless of your financial need, they will generally offer you a loan for a certain amount of money based on your student status and cost of education. After receiving this number you can decide how much you need from private student loans to cover the remainder of your educational expenses. So basically, pull a little from each area to make up what you need and don't forget to start the application process early to ensure you get all the money you need, regardless of what loan program you choose.