Student loans have always played a major role when it comes to financing their education. There are many different types of student loans, and there has always been a debate as to which is better a private student loan, or a federal student loan. Federal student loans take the show here since they come with numerous advantages. In this article, we are going to take a look at some of the advantages of federal student loans.
Doesn’t Require a Credit Check
It is less of a hustle to get a federal government loan as compared to a private lender since the students only need to fill in a Free Application for Federal Student Aid (FAFSA). This form can also be used to determine if the students qualify for federal grants, which they won’t have to pay back, scholarships, and work-study funding. Other funding institutions such as banks require credit checks in order to determine if students are eligible for loans. You should, however, note that when it is graduate students, or student guardians applying on behalf of student’s, they are subject to credit checks.
Cosigners Aren’t Necessary
In the event that the guardians applying for private student loans on behalf of students have bad credit scores, they require to have cosigners that will be held responsible in the event of a default. Federal student loans don’t require cosigners.
Fixed Interest Rates
All student loans come with interest but the terms are different, federal student loans coming with fixed interest rates. This means that once the interest rate is agreed on, it will remain that way, never increasing. Private student loans come with variable interest rates that can start off low and jump inevitably.
Lower Interest Rates
The interest rates for federal student loans are way lower than those of private student loans.
There are some federal student loans that are subsidized, the government even paying them for full-time students in some instances. They remain subsidized even when they defer, even though the interest continues to accrue in the period taken to repay the loans.
Start Paying After Leaving School
During the period that the applicant is a full-time student, they aren’t required to start repaying the student loans taken through the U.S. Department of Education. Private lenders require the students to start paying back while still studying, which could make them lose focus on their studies.
The Emerald Ash Borer
Focusing on studies, there are many courses that students can take depending on their qualifications and interests. They could even choose to study environmental studies that focus on the Emerald Ash Borer Colorado. This beetle is a pest that is threatening the existence of the ash trees by boring through them and depositing their larvae there. This action cuts out water supply to certain parts of the trees, leaving the trees to die. The US government has already spent in excess of $120 billion annually in their bid to control the beetle, which is a menace in more than 20 states. There is a treatment that can be applied every two years without fail, and the other option is to cut down the trees and replace them with other species of trees.
Federal student loans are much better than private student loans, and we have listed in this article. A good education could help find a solution to the Emerald Ash Borer menace