Student Loan Reviews

Student loans are loans specifically for higher education. These loans can come from the federal government or from private banks or lenders.

The first step in the student loan process is for families to fill out the Free Application for Federal Student Aid, or FAFSA. This will determine how much the federal government believes you and your family can afford to contribute to your higher education–your Expected Family Contribution (EFC).

Federal student loans come in two types: subsidized and unsubsidized. Direct subsidized loans are given to those with exceptional financial need. The U.S. Department of Education will cover the interest on these loans as long as you're enrolled at least part time and for the first six months after you graduate. Direct unsubsidized loans are granted regardless of need and begin accruing interest immediately.

Establish how much you need to borrow by subtracting your EFC from the Cost of Attendance (the amount it will cost you to attend your college or university of choice). You may also be eligible for grants and work-study programs to bridge the gap.

The Free Application for Federal Student Aid is the official form used to apply for federal student aid.

This form includes a series of questions about your family's income and investments to determine your eligibility for grants, work-student programs, and loans.

The FAFSA application period runs from October 1 of the year before the award year and June 30 of the award year. Early applications are a smart move because some states have earlier deadlines and may award aid on a first-come, first-served basis.

A Pell Grant is a federal subsidy awarded to students for post-secondary education. Pell Grants are awarded on the basis of financial need and, unlike student loans, do not have to be repaid except in rare instances.

In March of 2020, the White House extended student loan forbearance until Aug. 31, 2022, as part of the Coronavirus Aid, Relief, and Economy Security (CARES) Act.

Interest rates on these loans dropped to 0%, payments and late fees were suspended, and interest owed as of March 12, 2020, was eliminated from the principal balance.

First and foremost, know how much you owe. Figure out the total amount of student loan debt you accrued while you were completing your post-secondary education.

If you want to repay your debt quickly, establish a repayment plan with the shortest term you can possibly manage. This might mean making multiple payments each month.

But if you're looking to extend your term, consider an income-driven payment plan that calculates your monthly payment based on your family's income. This may mean paying off your student loan in more than 10 years. Keep in mind that while some income-driven payment plans allow for loan forgiveness after a set number of years, the forgiven balance will be taxed as income.

You can also take advantage of student loan consolidation, which will merge multiple student loans into one payment, making it a bit easier to keep up with your debt.

You might also consider refinancing your student loan, assuming you can get a better interest rate than you received on your initial loan. Refinancing typically requires good credit, however.

Automating your payments can help you avoid late payments and fees.