Individuals with financial need can obtain student loans without cosigner assistance through the Federal Direct Loan Program. The subsidized loans are need-based and do not require a high credit score and are perfect for student loans with bad credit. For this reason, those with low family income are able to get student loans without cosigner support. This gives even low-income students the opportunity to obtain a college or vocational school education.
Students can apply for both grants, which do not need to be paid back, and Federal direct loans by submitting the Free Application for Federal Student Aid (FAFSA). The FAFSA becomes available each year on January 1, and should be submitted as soon as possible after that. Each year a student will be in school, a new FAFSA must be submitted.
Cost of Student Loans
For each Federal loan received, the student pays a small fee at the time of disbursement. Loans also accrue interest. Subsidized Federal loans have the lowest interest, and do not accure interest until the student is no longer in school full time. Two types of direct student loans are offered; subsiduzed and unsubsidized loans.
Direct Subsidized Loans
Perkins loans and some Stafford loans are subsidized. Perkins loans carry a low 5 % interest rate, and do not begin accruing interest uuntil 9 months after the student has left full-time school. Up to $5,500 per year of undergraduate school can be borrowed under Perkins loan programs. Up to $8,000 per year of graduate school can be borrowed. People needing a Perkins loan can get these student loans without cosigner support.
Stafford loans can be either subsidized or unsubsidized. Unsubsidized Stafford loans begin accruing interest 6 months after the individual leaves full-time school. Individuals with a low credit rating can get these student loans without cosigner assistance.
Direct Unsubsidized Loans
Unsubsidized Stafford loans do not require students to show financial need. Unless the student has a good credit score, a cosigner will be needed for the unsubidized loan. It begins to accrue interest from the day of disbursement.
Direct PLUS loans go to parents of undergraduate students and graduate students. They claim an interest rate of 7.9%, which begins to accrue on the day of disbursement.
After 120 payments, some loans qualify for forgiveness of the balance if the borrower works full-time in a public service job. To qualify for this benefit, the loan payments must be up to date and the job must qualify. Most public school teachers qualify for this program.
If the borrower is having difficulty repaying the loan because of unforeseen illness or other problems, he should apply for a deferment or a grace period. Interest will continue to accrue, but the debt will still be in good standing.
A student who can show substantial financial need can obtain student loans without cosigner assistance. There are many options for bad credit student loans. This means that obtaining a college or vocational degree is within reach for an individual with talent and ambition. By obtaining Federal student aid, anone can pursue a degree and a rewarding career. Submit the FAFSA for student loans without cosigner support.
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