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Student loans play a significant role in higher education, providing access to a college education to individuals who may need more financial means to pay for it upfront. Availing of a student loan takes the stress out of worrying about how to fund your college education.
Education is a human capital investment, and student loans allow individuals to invest in their future earning potential. A higher education ensures individuals have access to better job opportunities and higher salaries over their lifetimes.
With a student loan, students can choose career paths based on their passions and interests rather than being limited to what their financial situation can afford. Therefore, the country will have a more fulfilled and productive workforce.
A well-educated population is vital for economic growth. Student loans contribute to developing a skilled and knowledgeable workforce, which can motivate innovation, productivity, and economic advancement.
Beyond the economic benefits, a college education has inherent value in encouraging personal development and critical thinking skills. Student loans make it possible for individuals to engage in this experience.
While student loans can be beneficial, they also have potential challenges, such as the debt burden after graduation. Students must explore all forms of student loans to minimize long-term financial implications.
Student Loan Refinancing
Student loan refinancing is a way to pay off your student loans by consolidating them into one new, more affordable loan. This makes the payment process easier, helps you save money, and gives you more flexibility with your finances.
Student Loan Options
Exploring various student loan options is essential to find the most suitable and cost-effective solution for your college education needs. Here are some common types of student loans.
- Federal Student Loans
The U.S. Department provides student loans to help students and their families cover college education costs.
- Direct Subsidized Loans. These loans are based on the student’s financial needs. The government pays the interest while you are still in school.
- Direct Unsubsidized Loans. These loans are available to undergraduate and graduate students and are not based on financial needs. Interest accrues from the time of loan disbursement.
- Direct PLUS Loans. The loans are applicable to graduate students or parents of dependent undergraduate students. They cover costs not met by other financial aid. However, they require a credit check.
- Private Student Loans
Private student loans are offered by private lenders such as banks and credit unions. The terms and interest rates vary depending on the lender and your creditworthiness. You can use this student loan to cover education-related expenses not met by your federal student loan or other financial aid.
We understand it’s not easy to get through school without financial assistance. A private student loan from Greater Alliance credit union can help pay for your educational expenses that weren’t covered by your financial aid package.
- Borrow as little as $2,000 or as much as $120,000 in undergraduate loan or $160,000 in graduate loan.
- 0.25% Interest Rate Reduction when you sign up for automatic ACH payments.
To qualify, applicants must meet credit and underwriting criteria:
- Be a member of Greater Alliance Federal Credit Union
- Current student or graduate of an eligible school
- U.S. citizen or permanent resident
Cosigners
An eligible and creditworthy cosigner can help applicants with limited credit history or income responsibly borrow and manage their education loans. A cosigner may:
- Increase the chance of loan approval
- Help lower the interest rate on the loan
The Student Loan Application
Qualifying for a private student loan typically involves meeting specific criteria. You can apply for a student loan with Greater Alliance Federal Credit Union online or by visiting any branch.
The student loan application should include this information to get started:
- Requested amount
- Degree pursuing (graduate or undergraduate)
- School Expected graduation date
- Academic period start date
- Class Standing (freshman, sophomore, etc.)
- Cumulative College GPA
- Major (degree you are pursuing)
- Proof of U.S. Citizenship or Permanent Residency
- Credit-worthy Cosigner ( if your annual income is less than at least $24,000)
- Email address
Student Loan Repayment Options
A private institution may offer these student loan repayment options:
- Standard Repayment. Fixed monthly payments over a specified term.
- Interest-Only Repayment. Payments cover only the interest for a set period, typically during the in-school and grace periods.
- Deferred Repayment. Payments are required after graduation or when you drop below half-time enrollment.
- Income-Driven Repayment. Payments are based on a percentage of your income.
Setting up automatic payments can lead to lower interest rates, and it ensures you won’t miss a payment.
Frequently Asked Questions
- What is a private student loan?
A private student loan is obtained from private lenders such as banks or credit unions to help cover college educational expenses.
- How is a private student loan different from a federal student loan?
Private lenders provide private student loans, while the U.S. Department of Education funds federal student loans. Private loans may have different terms, interest rates, and repayment options.
- What can private student loans be used for?
Private student loans can typically cover various education-related expenses, including tuition, fees, room and board, textbooks, and other personal costs.
- How do I qualify for a private student loan?
Qualification for a private student loan usually depends on factors such as creditworthiness, income, and enrollment status. You may need a cosigner if you have limited credit history.
- Can I apply for a private student loan without a cosigner?
Yes, however, having a creditworthy consignor can increase your chances of approval and may lead to better interest rates.
- What interest rates can I expect on a private student loan?
Interest rates on private student loans can vary based on the lender and your creditworthiness. Interest rates may be fixed or variable.
- Are there repayment options for private student loans?
Private student loan repayment options vary among lenders. Common options include standard repayment, interest-only payments, deferred repayment, and graduated repayment. Some lenders may also offer income-driven repayment plans.
- Can I refinance my private student loans?
Yes, refinancing is an option for private student loans. You may refinance to secure a lower interest rate, change the repayment term, or consolidate multiple loans into one.
- Are there any borrower benefits or protections with private student loans?
Private lenders may offer borrower benefits such as interest rate discounts for autopay, forbearance options, and flexible repayment terms.
- What happens if I have trouble making payments on my private student loans?
If you’re facing financial challenges, it’s crucial to communicate with your lender. You can take advantage of refinancing, forbearance, and other temporary relief options.