When looking to fund higher education, both grants and scholarships are almost free, government-supplied sources of cash to assist students cover the cost of their continuing education. Unlike student loans, which often have to be repaid, grants only have to be claimed (although there is an extensive application process). Unlike loans, there is very little time to go through the formalities involved in claiming these funds. Grants are not only a great help when it comes to funding your education but they can also save you hundreds of thousands of dollars over the life of your education.
Scholarships are more complicated than grants. For starters, there is no free grant money available for scholarships – rather, the funding comes from private foundations, corporations, etc, rather than from the government. This means that you will have to search out these sources and apply for as many scholarships as you can. The amount of scholarships you can get depends on the scholarships program you are applying for.
But what about the source – federal student loans?
Federal funding is probably the best available – there’s hardly any competition from universities and colleges to receive federal funding. The rules are slightly different when applying for loans from banks or other private lenders – you’ll need to show a good credit history and have a minimum score. If you do qualify for federal student loan funding, then you’re lucky – but this is where you’ll need to take the time to research exactly what you can expect.
When researching what you can expect to receive from federal student loans – private lending – first you’ll have to decide what type of lender you want to go with. There are both government and private lenders out there – in order to compare the two you’ll need to look at the interest rates. In general, the rates offered by government-owned banks and lending institutions are generally better than those offered by private lenders. However, this difference is not that large, and in order to secure the best interest rates you’ll need to shop around and compare.
If you’re looking to apply for federal financing, the interest rate is not the only thing you will need to consider. You also need to look at the repayment plan – are you able to make the repayment plan and the payments over the long term? Some private lenders offer a grace period following graduation, and if you want to take advantage of this you’ll need to find out what the criteria are for receiving the lower interest rate. Some private loans don’t require any grace period at all, but most do – it’s a good idea to see what sort of interest rate you will be offered based on your repayment plan.
You can’t rely just on the federal government when it comes to student loan debt relief. It’s true that most of them will help you when it comes to private loans – but you have to shop around in order to find the lowest available rate. You may not be able to secure the lowest available interest rate on federally funded private loans – the reason why you’re applying in the first place is to get a lower interest rate for your education. So, whether you want to borrow money for your higher education straight from the government or private lenders you will need to have a plan in place for finding the best deal.