Consolidating into direct loan program
While the name and precise lending protocols of the program may have changed, the bottom line for students is that Federal Direct Loans provide the best source for low-interest fixed-rate school financing.
All forms of federal financial aid are initiated using a standardized request form called the Free Application for Federal Student Aid (FAFSA).
As part of the Health Care and Education Reconciliation Act of 2010, Barack Obama and the 111th Congress cut out the middlemen and ended the private lender subsidy arrangement.
The move designates the student assistance effort as the only U. Government-backed lending program, and leaves the Federal Government as the sole administrator for Federal Direct Student Loans.
Whenever possible, pay for college with financial aid that doesn’t get paid back; but when free-money gift aid doesn’t cover all your bills, turn to student loans to bridge your higher education affordability gap.
The FAFSA compiles family data related to income and assets, to create accurate snapshots of each applicant’s ability to pay for college.Family size, and the number of members who are attending college influence federal financial aid awards.Students may apply as ‘dependent’ candidates, or as ‘independent’ FAFSA filers.Credit reports are summations of every credit encounter a person has logged during his or her lifetime – with greater numbers of successful interactions leading to positive credit scores.The problem for most college students is not a history of bad credit, but rather a credit history that simply does not include enough entries.
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To utilize the funds, students were required to enter into borrowing agreements with private lenders, who administered each student’s guaranteed Stafford Loan.