Federal Stafford Loan Program
Over 400 institutions around the world are eligible for the Federal Stafford loan program. Combining no-interest loan subsidies for qualified students with a Fixed Interest Rate, the Stafford loan program should be the first consideration for US students enrolled at an eligible institution.
Federal Student Loan Consolidation
Standard Student Loan Consolidation
The maximum student loan period is 10 years and the payment amount per month is fixed. This type of plan is suitable for students who can afford to pay a fixed amount per month. The interest rate would not be a big factor in huge student consolidation loans. Extended Student Loan Consolidation Payment Plan
This type of plan is similar to standard student loan consolidation except it has a longer repayment period of between 15 to 30 years. The repayment period is dependent on the student loan amount. Graduated Student Loan Consolidation Payment Plan
This type of plan is suitable for students still schooling and can only repay the student loan when they have a job after they graduated. The payment period is between 15 to 30 years. The payment amount per month usually starts low and increase steadily every 2 years. The intent is the as the student has worked for a longer period of time, their salary will increase accordingly and thus able to pay a larger repayment student loan. Income Contingent Student Loan Consolidation Payment Plan
This type of plan is complicated and is based on the student's income level over a period of years. It is also based on the family's annual gross income, other loan amounts owed, other assets, mortgages etc.
Sallie Mae Student Loans
A Sallie Mae student loan replaces your existing multiple student loans with one loan, usually with a dramatically lower interest rate - as low as 4.75%. The difference a few percentage points can make in monthly payment amounts can mean the difference between scraping to pay bills and actually having a little extra pocket money.
It is not uncommon for a borrower to get a fixed interest rate that is up to 0.6% lower than their current rates. According to federal regulations, calculating the interest rate on a consolidated loan disbursed on or after July 1, 1994 involves the weighted average of the interest rates of the old school loans you are consolidating under the new one, rounded up to the nearest one-eight of one percent. Fixed interest rates on a consolidated loan cannot exceed 8.25 percent.
Every July 1, the interest rates on federal student loans are subject to change according to the annual fluctuations of short-term federal securities, and with them your monthly payment. One of the benefits of a Sallie Mae student loan is that the interest rate is locked in for the length of the loan. While interest rates may be lower some years, when you are locked into an interest rate at least your payments will be predicable and will not rise in the years when the interest rates do.
The Standard Repayment Plan offers fixed monthly payments, but the life of the loan is limited to 10 years. The Extended Repayment Plan also offers fixed monthly payments, but spreads them over 12 to 30 years, depending on the total amount borrowed, which lowers the amount of the monthly payments. The Graduated Repayment Plan also spreads payments over 12 to 30 years, but the monthly payments increase every two years. The Income Contingent sets a payment plan that is calculated on your annual gross income, family size, and total consolidated loan debt, figured into a period of 25 years to pay it off.
Direct Student Loan Consolidation
A direct student loan consolidation is especially useful if you know you are about to default on your monthly student loan payments. A direct student loan consolidation can mean a new start since it is considered a new loan. When you consolidate your student loans under a new loan, your existing loans will show up as paid off, thereby increasing your credit score.
Before getting a direct student loan consolidation, you need to know the types of plans for repaying. There are four major types. You may like to investigate more to consider which is best for your needs. Standard Repayment Plan
Standard Repayment Plan allows you a fixed monthly payment for up to 10 years depending on the amount you owe. Extended Repayment Plan
An extended repayment plan allows you up to 30 years. Obviously, the longer the period, the less amount you need to repay each month. Do note, however that you will end up paying more as a whole if you spread your payment over longer periods of time due to interest rates. Graduated Repayment Plan
Graduated Repayment Plan usually have a repayment period between 12 and 30 years. The main difference between graduated and extended repayment plan is for graduated, the amount of your monthly payment will increase every two years. Income Contingent Repayment Plan
If you have a job, then this plan may be what you are looking for. The income contingent repayment plan set a monthly payment based on your gross annual income. Other factors include your family size and the amount owe. The repayment period is usually 25 years.
Federal PLUS Loan Program
Many institutions around the world are eligible for the Federal PLUS loan program. The PLUS loan program is available to provide funds to cover up to your entire cost of attendance (as determined by the eligible institution) for US students. For Graduate/Professional students, it is recommended that you request the maximum under the Federal Stafford Program prior to requesting PLUS funds.
US ISLP Private Loan Program
When you need additional money, or if your school is not eligible for the Stafford loan, you may be eligible for the credit-based International Student Loan Program (ISLP). Students should first apply for the Stafford loan where eligible, and then apply for additional funds through the ISLP.