Comments on: Government Student Loans, Government Aid

By: Jonell Calixte

Jonell Calixte — Fri, 18 Mar 2011 06:25:12 +0000

Thank you for this article. I might also like to say that it can possibly be hard when you’re in school and starting out to establish a long credit history. There are many learners who are simply just trying to pull through and have a long or beneficial credit history can be a difficult thing to have.

By: big h

big h — Thu, 27 Aug 2009 10:14:59 +0000

private loans are credit required. most students have little or no credit. taking out a student loan from the gov will not require credit and it does build credit
References :

By: Found-1

Found-1 — Thu, 27 Aug 2009 10:12:59 +0000

Most college students don’t have good enough credit and sufficient income to do private without a cosigner. Unless you have a full time job and plan on keeping the full time job your interest rates and terms they quote on their sites won’t always be what you actually are offered.

Read their materials very carefully… does it say "as low as 4% interest" then has asterisk by it saying a disclaimer like… "your interest may be more depending on creditworthiness" or something similar? Just be cautious.

Variable rate loans are VERY scary. Have you been hearing all the talk about the mortgage crisis? Those folks took out variable rate loans and now their payments are double what they were paying. Variable rates also may include them being able to spike the rates if you miss a payment deadline. One auto draft miscalculation or mistake by even a day might make your interest spike for whatever reason they want. What once was 10% is suddenly 32%.

Also, federal loans have mandated deferment, forgiveness and forbearance policies. If you were to die or become disabled that private loan (remember they are not regulated by anyone so it could be anything) may STILL have to be paid back. Kind of a bummer for your cosigner or your children!! Some private loans also have "Prepayment Penalties". Meaning even if you pay it off in a year you are still responsible for the interest for the rest of your term. Can you imagine having to pay 14 years worth of interest even though you paid the original loan off? It’s crazy.

What happens if the school suddenly closes and you can’t finish your degree? You become pregnant and can’t pay for a year. Federal loans REQUIRE your lender to give you mandatory relief from paying for certain situations. I think it’s a total of like 3 years if you add it up. Private may do whatever they want.
References :
I am reminded about an 18 year old girl I helped enroll in college. She had investigated ways to help her pay and finally signed up for the ARMY reserves. I still remember her smiling and laughing and saying, "Cuz it’s not like we are going to go to war or anything". Three months later 9-11 happened and she had to leave school because her unit was called to active duty. I will always remember the look on her face when she said that and my reaction when I heard she was called up.

You never know what might happen tomorrow….

By: Lahdeedah

Lahdeedah — Thu, 27 Aug 2009 05:10:57 +0000

Why use up government student loans before private?
Why does everyone say to use up all government-funded student loans before getting private ones?
I can get a much better interest rate with NO origination fees with Wachovia, a private loan; while the government loan offered to me has 4% origination fees, higher interest rate, and is unsubsidized.
The only thing better about the government loan is it is fixed rate. Is that really that important? Do variable rates with private loans usually increase alot? It depends the going rate at the time in the economy right?