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#GradSchool101 – Federal Student Loan Programs

So the FAFSA stands for the Free Application
for Federal Student Aid. Its a free a free service a free service the department of education
offers. You can fill it out for free submit it for free its not that difficult to complete.
With the FAFSA you can qualify for federal work study for federal student loans such
as the grad plus loan or the Stafford unsubsidized loan And the size of those awards are need based. And these loans are not just for to cover
tuition, these loans can cover your cost of living during school they can cover your housing
food, books, rent. I think everybody should fill out the FAFSA
when they are looking at school I think it should just be one of the things you do just
completing the application. People are often surprised with what they do qualify for. Short
of having a trust fund you know and even in some cases if you do I think you should fill
out the FAFSA. And once you get your aid offer letter, you
always have the option to only accept part of it or none of it depending on what you
prefer. Because you never know what might change when
you are in school and filling out the FAFSA just allows you in the middle of the year
say if your resources change, to be able to get a loan whereas if you don’t complete it
in time, then even in the middle of the year if something changes you won’t be able to
get a student loan to cover the cost of school and you may have to drop out or scramble for
other options and it just gives you it just keeps your options open for financing your
education. I think the governments trying to make it
easy for students to pay back their student loan debt by providing options like the Federal
Public Service Loan Forgiveness program as well as Income Based Repayment. The Income
Based Repayment program really just ties the payments on your debt to your income so sort
of a sliding scale. If you are taking out a federal loan and this
only applies to federal loans not private loans, it allows graduates to repay a loan,
but it is capped at fifteen percent of your discretionary income so it allows you to live
and yet at the same time repay your loan The Federal Public Service Loan Forgiveness
program allows students who are working in the government or non profit sectors, after
a period of ten years, to have their loans forgiven and the way it works is that when
you finish with school your debt is what is called what is consolidated in a way that
qualifies them with this program and then you as the borrower essentially make a hundred
and twenty payments, so monthly payments over a ten year period which equals a hundred and
twenty and as long as you do that and you’re still during that entire time working for
a public service organization or a government entity you can have your loans forgiven, and
that includes the principal and the interest. And it was established in 2007 so we haven’t
seen anyone walk away with the hundred twenty payments yet but we have great hopes for it
and it is something that we do recommend to our students to consider once they graduate
because for a lot of our graduates that is the sector that they are going into. For folks in the social sector I think this
is particularly important because salaries are not as high as they are maybe in the private
sector or in finance or working in a traditionally well payed field, folks tend to be making
less in this field. I would definitely say do your research on the federal public service
loan forgiveness program or income based repayment there are websites out there that summarize
these programs in as clear a manner as possible I think, and definitely read the fine print
so that you’re understanding what you are getting yourself into. Obviously read the
fine print on your student debt to understand how it works and so that your going into it
with your eyes wide open.

About James Carlton

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