There’s nothing like getting approved for grants and scholarships to help navigate your way through college or university. However, if you have applied for loans, you’ll be experiencing the brunt as a borrower as collection agencies and lenders pursue you for repayments. Then, you’ll be in more financial difficulties as before. So if you’re in financial trouble as a student, you need to seek help.
The question is, can you acquire financial aid for paying back your student debt?
In reality, no. There’s no federal financial aid available to help fund student loan repayments.
The federal government and private lenders do provide options to alleviate that financial burden on student loans.
Here are options that students can avail to help them with their financial needs.
One basic option is student loan consolidation, where you could make simpler your repayment schedules. If you can obtain lower interest rates than your school loan payments, then you can spare yourself some cash. If the loan consolidation covers the duration of your student loan repayment terms, then you may benefit from monthly payment reductions now when you are still struggling as an entry level employee and aren’t making a huge income yet. You can always grow your payments as your salary increases.
Stafford loans provide rescheduling of payments, however, take heed that some private lenders do not. They are usually contracted for unemployment or other economic privations, or if you are still studying.
During deferment, student borrowers can either pay the interest only, or they can capitalize the interest by complementing their entire debt and paying interest on the interest following the deferment period.
For student borrowers who have subsidized loans, the federal government pays the interest during the deferment. If your loans have been subsidized federal loans based on need, you can receive this type of assistance if you have difficulty with your loan repayment.
Usually, forbearances may last up to 12 months, but in some cases lenders do not permit them due to severe circumstances. This would also result in interest accumulating in every case.
Try to avoid defaulting on a student loan. You might lose access to emergency financial aid or other social security services, your tax returns can be withheld, your wages can be pending and your professional position can be revoked or suspended.
If you’re at risk of defaulting, you can consolidate your loan either through the U.S. Department of Education or a private lender of your choice.
The student loan consolidation process is the only way to minimize the amount you pay with help from the federal government. If your debts are consolidated, there are actually various plans available for your utilization that enables you to pay your debts and loans in a way that’s suitable to your economic or social situation. You can change your plans if your situation changes over time.
You can also avail of income-based plans. These plans will have your salary taken into consideration, as well as your family size and expenses. It will also address if you are disadvantaged enough to not be able to pay back your loans. The problem with this plan is that in order to get out of your debts, you have to remain impoverished for most of your life.
As higher education pays to be the most important investment a student can ever make, President Barack Obama has introduced his plan to make quality higher education affordable and accessible for all Americans in a Student Bill of Rights.
The said bill of rights mandates the U.S. Department of Education and other agencies to expand protections and flexibility repayments for student loan borrowers.
As part of his executive actions, President Obama will sign a Presidential Memorandum directing the U.S. Department of Education and other federal agencies to build a centralized complaint system for student loan borrowers by 2016, provide a series of steps to help students pay back their loans, and offer new steps to examine trends in student debts. Additionally, Obama will require contracted loan servicers to initially implement extra payments to highest interest rate loans instead of evenly across loans, which results in having borrowers pay more over time.
The Consumer Financial Protection Bureau will collaborate with the Obama administration focusing on improper payment allocations as the key concerns of private student loan borrowers.
According to the Obama administration, the Student Aid Bill of Rights states that:
I. Every student deserves access to a quality, affordable education at a college that’s cutting costs and increasing learning.
II. Every student should be able to access the resources needed to pay for college.
III. Every borrower has the right to an affordable repayment plan.
IV. And every borrower has the right to quality customer service, reliable information, and fair treatment, even if they struggle to repay their loans.
The administration will also release a state-by-state data showcasing outstanding federal student loan balance and the total number of borrowers who would benefit from these actions.
That being said, President Obama has taken great steps to provide struggling students with poor loan services with a complaint system so that their voices can be heard. Aside from the complaint system, the Department of Education will also create a centralized system where loan borrowers can access information regarding their repayment loans, irrespective of their servicers.
To promote affordable loan payments, the Obama administration will take these executive actions to protect investments of taxpayers as well as help borrowers responsibly pay their debts and improve student loan servicing at the federal level:
With the Student Aid Bill of Rights, American federal student loan borrowers are entitled to accurate and detailed information to help them make the right decisions to manage their debts and repayments.
Receiving financial aid can help students get back to their learning feet. Financial aid funds added educational costs and lessens the financial burden on students and their families. The federal government has introduced great funding opportunities that offer students the capacity to fully fund their education.
As an undergraduate student wishing to get monetary government aid, you have to fill out an application for students first. Applying early is crucial since it will help in the deliberation of funding sources available. Any qualified student who can prove that he or she requires the supplementary funding will increase the chances of attending college. At first glance, the financial loan scope can be intimidating. However, if you set the time to do research and complete the application, it can be very easy.
The application form is called the Free Application for Federal Student Aid, or known as the FAFSA, that can be prepared and filled out annually by existing and prospective college students.
Before you starting to fill out your application process, you can try checking to see if you qualify for obtaining the financial aid from the government. When you have addressed your chances, then you can go ahead and apply. After you have completed your initial application, you can now continue to your chosen college of study of which the financial aid office will offer some type of assistance.
The application form will also require calculations to determine the funding amount to be handed over based on the need of the students and their families. There are particular programs based on merit and household income that will contribute to how much funding undergraduate students will get.
Here are some websites you can peruse to start your government financial aid search:
Federal Student Aid is an office of the U.S. Department of Education that makes it easy for students to pursue their dream courses and careers by financing their educational needs. The funds that are being administered by FAFSA is based on need. The funds are mostly given based on the financial status of a student and the calculated overall income of the student’s family. Usually, the money doesn’t need to be repaid, but there are loans that need repayment. FAFSA provides grants, loans and scholarships to undergraduate and graduate students, be they single mothers or veterans.
The site is explanatory; you can easily access and browse information on the many government benefits available including financial aid for students. What you need to know about Benefits.gov is that the site has been reliably serving hassle-free, improved and value-added service to American citizens in the process of seeking programs and resources that would significantly benefit them and their families.
Managed by the U.S. Department of Health and Human Services (HHS), this site currently provides information and resources on grant programs and vets grant applications for its 26 federal grant-making agencies. For students seeking financial aid, they can easily spot a search button for grant opportunities and type in their keyword of grants, scholarships or loans.
GovLoans.gov acts as a portal to all the government loan information you need. There are agencies listed whose loan programs are represented on the website. For instance, you can search for student loan and grant programs offered by the U.S. Department of Education or the U.S. Department of Veterans Affairs.
