your credit is damaged in any way, you may have a difficult
time finding a student loan. I've been in that exact same position
at one time, and there is hope for you too. What I did was apply
for the Federal Stafford loan. Applying is fairly easy and you
can get an answer back quickly. The other option I would suggest
as far as government student financing assistance, is to research
the Federal Perkins student loan.
Federal Perkins loans are advanced via participating schools
to undergraduate and graduate/professional students - whereas
the Stafford Government loans are for undergraduate or graduate/professional
students made through one of two U.S. Department of Education
William D. Ford Federal Direct Student Loan Program - know as
Direct Stafford Loans or Direct Loans
Federal Family Education Loan (FFEL) Program - know as FFEL
Stafford Loans (Federal Stafford loans)
There is another option students have if they are burdened with
bad credit, and they are called PLUS Loans. Plus Loans are financing
parent(s) may acquire for their undergraduate children. Their
children must be dependant children, mind you. These PLUS LOANS
are acquired through the Direct Loan or the FFEL student loan
requiring financing with a poor credit history, would likely
find their best chances are seeking a federal Government loan.
There are some facts you want to know regarding federally sponsered
student loans; There are two distribution channels for Federal
student loans. The channels are identified by their names: Federal
Direct Student Loans and Federal Family Education Loans. Federal
Direct Student Loans, also known as Direct Loans, or FDLP loans
are funded from public capital originating with the U.S. Treasury.
loans are distributed through a channel that begins with the
U.S. Treasury Department, and from there passes through the
U.S. Department of Education, then to the college or university
and then to the student. Federal Family Education Loan Program
loans, also known as FFEL loans or FFELP loans, are funded with
private capital provided by banking institutions (ie: banks,
savings and loans, and credit unions). Because the FFELP loans
use private capital as their source, students who use FFELP
loans are able to take advantage of payment options that are
similar to those available to customers who take out a home
loan or a consumer loan. For example, some institutions will
allow a discount for automatic payments, or a series of on-time
payments. In 2005, approximately 2/3 of all federally subsidized
student loans are FFELP.
maximum amount that any student can borrow is adjusted from
time-to-time as Federal policies change. A study published in
the Winter, 1996 edition of the Journal of Student Financial
Aid, titled “How Much Student Loan Debt is Too Much”
suggested that debt for the average undergraduate should not
exceed 8% of total income after graduation. Some financial aid
advisors have referred to the 8% level as “the 8% rule.”
Circumstances vary for individuals, so the 8% level is an indicator,
but I would suggest if you are still in a bad credit situation,
you want to lower that percentile.
Private Loans it is far simpler. The lender generally disburses
the money directly to the school. Any funds borrowed beyond
tuition and fees is given to the student for living expenses,
room, board, etc.
of your choice (Federal or Private), you must look into understanding
your credit rating. What you want to do is check out your credit
score by going to a site like www.myfico.com, and get yourself
a credit report.
you have a complete credit score for yourself, you should then
venture out and try to acquire student financing. For government
student loans you should check out the Federal Stafford loan
and the Federal Perkins loan.
Now, for a last resort, you can try some of the other bad credit
lenders available online and offline. Be careful to make sure
you read all the small print and don't get caught up in any
ridiculous terms and high interest rates. When you are finally
finished your education, be sure to keep your financial nose
clean. All the very best to you in your future endeavors and
your educational quests.
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