Know Your Basics

Student Loans. A necessary evil for many students. Know your jargon. 

If you are a college graduate, currently in college, or applying for colleges, you may come across many new and confusing financial terms. Boring, but you can research yourself for a few hours, or read my nutshell versions.

FAFSA
AKA The Free Application for Federal Student Aid
is a form that can be filled out annually by current and future college students for both undergraduate and graduate students. This determines how much federal aid money you will get, which in turn is money that does not have to be paid for school.
More detailed information here.
https://studentaid.ed.gov/sa/fafsa/next-steps/how-calculated

Scholarships/Grants
This is a more common term. Scholarships and grants are awarded money amounts from various locations, that do not have to be paid back. Usually, scholarships take some researching and work on your behalf. You can do a search online for scholarships for almost any area. Examples; sports, academics, heritage, or even something like wearing glasses. Be prepared to write some essays! The more money you have from outside sources such as these, it is less money via loans, and less to be repaid.


Federal Loans 
Funded by the government. The interest rate is fixed and often lower than private loans. You can see the current rates here:
https://studentaid.ed.gov/sa/types/loans/interest-rates
Federal Loans can later qualify for loan forgiveness programs and various repayment plans (more information later).

Unsubsidized Federal 
Your school determines the amount needed
You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
Must be enrolled in school half-time or full-time
Most times no co-signer is required. Credit checks are not needed

Subsidized Federal 
Government pays the interest while you are in school
Your school determines the amount needed
Must be enrolled in school half-time or full-time
Most times no co-signer is required. Credit checks are not needed

Private Loans 
(the devil) or given by non-federal lenders like banks and credit unions.
Can be a variable interest rate and determined based on credit and current bank rates (some of mine before were over 10% SICKKKKK)
Requires a credit check. Often need a co-signer
Interest usually begins at the start of the loan

If you already have loans, get to know what types you have. I have both federal and private. My private are the killers (or were…I recently refinanced and they are way more manageable). 

It is important to become best friends with your loan servicer website. I log in a few time a week on Navient and Firstmark. I know my interest rates for each type of loan and I keep them separate when calculating payback amounts. 

I have 44k in private student loans. Those had the worst interest rate. Whenever I have extra money to throw towards more of a loan payment, I pay more towards the higher loans with the higher interest rates. This cuts away at the principal (or actual amount of the loan minus interest). 

26k of my loans are federal. I know that being a teacher I can eventually and hopefully qualify for some special education student loan forgiveness up to 17,500. I can also hopefully get Public Service Loan Forgiveness (more info to come). So, my federal aren’t my first concern and seeing as the interest rates are lower, I am tackling my private much more aggressively.



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