federal student loans shoud be prioritized
Phoenix, AZ (PRWEB) November 29, 2014
Debt Consolidation USA recently explained in an article on how to understand the difference between federal student loans and private student loans. The article titled “Understanding The Difference Between Federal And Private Student Loans” can help students and parents as well in identifying the right student loan for them.
The article starts off by pointing out that a lot of people still believe that taking out student loans to pay for higher education is a great investment and falls into the category of a good debt. This is because a college education can set up students for a chance at a greater financial life after school.
The problem is that the student loans debt continues to increase and the number of people struggling to pay back the loans is growing as well. This means that the number of people paying off their student loans are being outnumbered by the people taking out and remaining in student loan debt.
The article explains that understanding loan types can help borrowers manage their debts a little better. It goes on to explain that federal student loans should be prioritized because of all the benefits it has over private student loans. One of which is being able to regulate the amount that can be borrowed for school.
One unique characteristic of federal student loans is being need based as compared to credit based for private student loans. With the exception of Direct Plus loans, federal student loans does not require a credit score to be approved. On the contrary, the more the borrower needs the loans, the bigger their chance of qualifying for subsidy on some loans.
The article also points out the numerous repayment plans available for federal student loans. Some of which takes into consideration the income of the borrower in computing for the monthly payment amount. To read the article, click this link: [http://www.debtconsolidationusa.com/student-loans-2/understanding-difference-federal-private-student-loans.html