Christian Direct Federal Student Loan
Direct federal Christian student loans are funded by the U.S. government and are relied upon by many students to help finance their college educations. These are extremely popular and advantageous for aspiring college students. Easy qualification guidelines, attractive interest rates, and flexible repayment options are just a few of the reasons that a college attendee would turn to a direct federal student loan to finance his or her education.
This type of lending is frequently referred to as the Stafford Loan and two versions exist. One, the Federal Family Education Lending Program (FFELP) provides lending from private lenders such as banks and credit unions. The government guarantees this direct federal student loan against default. The other, called the FDSLP, provides lending directly from the government to college students and their parents. This lending is either subsidized (the interest is paid by the government while the borrower is attending school) or unsubsidized (borrower pays all of the interest, though not necessarily until they have completed their education).
All students, regardless of their financial need, are eligible for the unsubsidized lending. The amount that can be borrowed varies depending on the year of schooling. For example, dependent students in their freshman year can borrow up to $2,625; in their sophomore year they can borrow up to $3,500; and in each remaining year the limit increases to $5,500. Students can apply for both the subsidized and unsubsidized government lending at the same time, for the same time period. In fact, many students apply for both and receive the maximum amount. The limits on direct federal student loans for graduate students are much higher: up to $18,500 (of which of $8,500 is subsidized).
To apply for this lending, the applicant must file the Free Application for Federal Student Aid (FAFSA) form. Even though approval of the unsubsidized portion of the direct federal student loan (the Stafford Loan) is not linked to financial need, the form still must be submitted. Applicants can find this form online or in the financial aid office of their college. All lenders offer the same variable interest rate government lending, and the rate is capped at 8.25%. However, it is still wise to shop around because some lenders may offer a slight discount if the borrower agrees to automatic online payments. In addition to direct federal student loans, many banks, credit unions, and other financial institutions offer supplemental, private lending programs.
College can be an eye-opening, mind-expanding, future-planning time of life. The use of direct federal student loans allow the borrower to finance a college education wisely. Applicants can speak with the college's financial aid officers and a tax adviser or accountant if they have any questions. "Hear counsel, and receive instruction, that thou mayest be wise in thy latter end," (Proverbs 19:20)
Direct student loan consolidation organizations vie for a student's business in this day and age when the major source of funding for a higher education is through educational lending. Every year a college attendee must reapply for borrowing, and many times throughout a student's educational career, their college lending is bought and sold, resulting in a mess of different options, a variety of payment amounts, and repayment schedules. Direct student loans consolidation can ease the burden of such disarray and allow the borrower to make just one monthly payment to one lender.
The most popular consolidating organizations are those that receive guaranteed government funding. Some private direct student loan consolidation groups have insurance from organizations up to a certain limit, and therefore must allow certain restrictions and limitations with their deferment options and repayment terms. The best organizations allow for deferment periods indefinitely while a student is enrolled in school. Some direct student loans consolidation require that a college attendee be enrolled in a degree seeking program not to exceed 4 years, while others allow a flat 3 year deferral and never more.
Government sponsored and guaranteed programs allow repeat consolidating if the student takes out another amount at a later date to pursue their education further. When this happens, a new loan is formed, including the offering of a new deferment period. This deferment period is especially essential to borrowers and could make the difference in selecting one direct student loans consolidation program over another, far more than the interest rate. Borrowers opting for a better deferment or forbearance period should stay within the government guaranteed participating lenders. These lenders offer no time limitation of in-school deferment periods, as long as the student is enrolled half time, and as long as the school participates in federal financial aid programs.
These lending programs utilizing the governmental guaranteed program do have maximum limits. These limits can be stretched into a repayment term not lasting longer than 25 years and usually carry the absolute lowest interest rates. Students choosing the government direct student loan consolidation programs need to be aware that just because the government guarantees the program, doesn't mean the government is responsible for repayment. When a Christian borrower makes a promise to pay, that promise is first to God. The Bible says in Ecclesiastes 5:4-5 " When thou vowest a vow unto God, defer not to pay it; for He hath no pleasure in fools: pay that which thou has vowed".
Christian Direct Student Loan PaymentDirect student loan payments are debited from the borrower's checking or savings account by the lending institution each month on the due date. With all the stress of daily life, direct student loan payment plans take the worry and hassle out of remembering to make the payment each month. Of course, the borrower must sign an authorization form, which provides account information in order for the amount to be debited.
Having the option to pay directly will eliminate the need for paperwork. Receipts will be sent via email to allow the individual to keep up with when and how much the bills are. Also, the individual will not have to write a check or keep up with payment stubs when they have the ease of direct student loan payment. If someone is concerned about not having a paper receipt for direct student loan payments, they can keep bank statements as proof that the money was debited from the bank account. If at any time the person wishes to cancel this service, most lenders require written notice. The individual should be sure to do this in plenty of time before the next bill is due.
Many students are fortunate enough to have their parents to repay the amount owed to lenders for educational purposes. It might be the case that the parents will pay the bills until the child graduates and gets a job. At that point, the student will assume the direct student loan payments. Some lenders offer incentives for utilizing the direct student loan payment as the primary method of repayment. This service will ensure that repayment is completed on time and many lenders offer interest rate reductions if the individual is not late over twelve month periods.
If an individual takes advantage of a direct student loan payment or other such programs that will reduce the interest rate each year, they can significantly reduce the amount of interest that they will pay over the life of the loan. The easiest way to make sure the debt is paid on time is by using direct student loan payments. It is one less thing for a person to remember and they can rest assured that you are doing the right thing in paying what they owe on time. "Finally, brothers, whatever things are true, whatever things are honest, whatever things are just, whatever things are pure, whatever things are lovely, whatever things are of good report; if there be any virtue, and if there be any praise, think on these things." (Philippians 4:8)
Direct student loans are low interest loans designed to help college attendees pay for education after high school and they are fairly easy to obtain. There are no credit checks, no application fees and are catered to a students needs based on the program of study. This lending is either subsidized or unsubsidized. A subsidized amount is awarded based on a financial need basis only. The federal government pays the interest accrued until repayment begins for the college graduate. An unsubsidized amount is not awarded on financial needs. Borrowers will pay the interest on the amount from the time that the funds are dispersed.
A student can choose to pay the interest in installments or allow the loan to accumulate interest. In this situation, the interest will be capitalized, added to the amount of the principal and will increase the amount repaid in the end. Paying along the way will save the most money on a direct student loan. Anyone who is a degree-seeking college attendee enrolled half-time or more in college credit classes is eligible for one. The amount borrowed is based on the program of study and how many years the borrower has completed in college. For example, a first year college attendee will be able to borrow less in direct student loans than a college attendee who has completed two years of study. Interest rates paid will be lower while a borrower is attending college. Once the education is finished the interest rate will be higher.
Many students like to obtain this lending because the interest rates are so low. There is a nominal fee to pay once a direct student loan is disbursed. A portion of this fee goes directly to the federal government to help decrease the cost of lending. Collection and late fees may also apply if payments are not made when scheduled. Amounts are paid back to the lender after a borrower leaves school, drops below the half-time enrollment mark, or once a borrower graduates. Lenders also offer a six month grace period before repayment will begin. During the grace period, a borrower will receive payment information on their direct student loans. The lender will notify the student, usually by mail of the repayment amount, current interest rate, and the date payment is expected.
"My covenant will I not break, nor alter the thing that is gone out of my lips" (Psalm 89:34). It is vital that a Christian college attendee pay the debt on time and the full amount - not doing this can negatively impinge on the students credit report. It is possible to receive a deferment on a direct student loan under certain circumstances. For example if a student were to earn an associates degree and wanted to obtain a bachelors degree, payment would be deferred while the student is enrolled at least half time. Guidelines may vary according to lender for deferment.