iBest Student Loans

Government Guaranteed Student Loans

One of the most important aspects of higher education is finding student loans that will best meet your educational needs and financial situation. It can be difficult obtaining the funding needed to ensure your educational goals and dreams; making government guaranteed student loans a popular choice. A government guaranteed student loan indicates that the lender is assured the amount lent will be repaid as the federal government or United States Department of Education will take over and repay should the borrower default. Examples of government guaranteed student loans include PLUS Loans and Stafford loans through the Federal Family Educational Loan Program (FFELP).

A government guaranteed student loan is backed by the government as the federal government becomes the guarantor of the loan. In addition to federal backed loans, there are also state guaranteed loans that are issued through each state’s department of education. These loans are all issued under the FFELP programs, so all students should check with their local state’s educational loan programs to see if they are eligible.

FFELP (Federal Family Education Loan Program) loans are offered through lenders such as credit unions, banks and S&L associations. Other loan programs include the Federal Direct Student Loan Program also known as FDSLP. These loans are provided through Direct Lending Schools and are backed by the government.

Those who wish to apply for a Stafford government guaranteed student loan must have some degree of financial difficulty. Stafford loans are either subsidized or unsubsidized. A subsidized loan ensures that the government will pay the interest on the loan while you are attending school. Unsubsidized loans indicate that the borrower will pay the interest on the loan, but they may be able to have the payments delayed until after the borrower graduates school. Stafford loans are only provided to those who are in financial need and the majority of recipients are those who have a family adjusted gross income less than $50,000. About a quarter of all Stafford Loan recipients have an adjusted family gross income between $50,000 and $100,000. Less than ten percent of all students who get the Stafford loan earn more than $100,000.

Those who choose an unsubsidized Stafford Loan will find that the overall cost of the loan increases due to the interest payments. Make sure to determine whether or not you require and can be approved for an unsubsidized loan. When choosing Stafford Loans, you’ll find that the interest rates are fixed at 6.8%. Determine whether your loan interested in is subsidized or unsubsidized before making your final decision.

A government guaranteed student loan comes with many benefits and advantages, the first of which there is no credit check involved with the loan. Since there are no credit checks, many lenders would normally be very worried to extend credit on a loan; however with the government backing, lenders will extend loans to those who otherwise may not have the means to obtain the education they need.

Direct student loans are an excellent way to find a government guaranteed student loan that can help you meet your financial costs and burdens. The Direct Student Loan Program differs from the FFELP and was formerly called the William D. Ford Federal Direct Loan Program. With a Direct Student Loan, you can obtain a loan that is backed by the United States Department of Education. Those who can qualify for these loans often find that they are a great way to get the funds needed for their education. Those who want to apply for a direct government guaranteed student loan must fill out an application on the FASFSA website. The FAFSA is the Free Application for Federal Student Aid, and the only way to qualify for a direct loan and a state based student loan is to fill out an FAFSA.

A government guaranteed student loan is a great way to get the money you need for college, especially if you or your parents have poor credit and are lower income.

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