Best Student Loans for Fresh High School Graduates
If you’re on your path to a better academic career, do not stop yourself because of the lack of finances. In this article, you will find all the important information regarding the best student loan options for high school graduates. Learn about all the best student loans to understand the different methods of borrowing money to pay for your college expenses.
So once you are done exploring the grants and scholarships, you might want to check out the federal student loans available for high school graduates to continue education. You may also be interested in learning about private student loans, that are not associated with the government. The only way to determine which option is the best, keep reading.
The Different Types of Student Loan Options
Learning about your borrowing options is the first thing you need to think about. As mentioned above, the two most common ways to borrow money for college are federal and private student loans.
Let’s check each of these options in detail:
Federal Student Loans
There are three different types of federal student loans. These loans are backed up by the government directly and are associated with the Federal Direct Loan Program.
- Direct Subsidized Loans
These loans are given to students based on their financial needs. The procedure for this one is pretty detailed to ensure fair judgment is given.
- Direct Unsubsidized Loans
These loans can be given to students even if there’s no exceptional need for finances. Also, these are non-credit-based loans, so you don’t have to arrange a consigner to be eligible for these loans. Your school will be involved in the process to determine the amount you can borrow.
- Direct PLUS Loans
These, on the other hand, are credit-based loans and are unsubsidized by the government – meaning the government will not pay for the interest on the loan. These loans can be given to parents, graduate students, and professional students.
It is recommended that you always check out your federal loan options first before going for a private student loan. While private loans are comparatively easier to get, they usually have higher interest rates, and different repayment options.
Private Student Loans
After exploring other financial aid programs like federal loans, grants, and scholarships, you still have the option to turn to private student loans if you need more money for college. These are issued by private lenders, banks, and other financial institutions, and therefore, do not follow any standards for interests or repayment options.
- Private Student Loans
These are exclusively available for students but often require a consigner to get the loan. Students can ask their parents or any creditworthy individual they know to become their consigners.
- Parents Loans
The loan can be opted for by the parents of the students as well through this option.
Applying for the Loan 101
Both federal and private student loan options have different processes for application.
For a federal student loan, you need to fill out the FAFSA (Free Application for Federal Student Aid) program. This is a must step to start of your federal loan eligibility process. But before you submit the FAFSA or any application for a federal loan, here are a few important things to keep in mind:
- The submission of these applications is absolutely free.
- You must complete the FAFSA for each year you need money to continue college
- Be proactive with your approach. The earlier you opt for it the better.
You can only find out about the amount that you’re eligible for once you get your financial aid offer.
On the other hand, when you opt for a private student loan, the processes would vary depending on the lender you choose. However, the application in this regard is pretty direct. Here are a few steps to make it simpler for you:
- Check out the lender’s website and learn about the loan options available for you.
- Always compare the interest rate and check the repayment flexibility to opt for the best option available.
- With private loans, you can also apply on the website. Make sure you choose your interest rate type and repayment option according to your suitability.
- Adding a credit-worthy cosigner always improves your chances of getting the loan. So make sure you think about that option.
- The lender will communicate the decision after thoroughly checking out your application.
It is imperative to be absolutely responsible for your loan. The key is to study the repayment option in detail before opting for a loan, such as the case with FAFSA loans. Also, it is best to first look for free money that’s not only interest-free but is non-repayable – such as grants, scholarships, and work-study loans.
You can then opt for a federal student loan option if you still need money for college. A private student loan should come as a last resort, and the first thing students need to learn is how to start investing for a financially free future.