Education

Seeking a higher education can be vital to achieving individual career goals. The cost of a higher education can be a substantial burden for many people. Click below for resources on some common education topics including student loans.

Topics of Interest - Education

The Basics of Student Loans

  • The Department of Education’s website is a great information source for student loans.
  • There are two types of student loans: federal student loans and private student loans. Other sources of financial assistance are federal grants and work-study.
  • Most student loans are federal student loans and are always recommended before the use of private student loans because they offer flexible repayment options and fixed interest rates.
  • Federal Student Loans:
    • In order to apply for financial assistance for your education, there are a few things you will need first:
      • A FSA ID: A Federal Student Aid ID to access the Financial Aid online systems. The FSA ID also acts as your electronic signature when completing an application.
      • A FAFSA: Free Application for Federal Student Aid.
      • It is important you review the Federal Student Aid website to learn more about eligibility requirements, estimates of aid, and funding your education.
      • The FAFSA will also help you to determine if you qualify for grants or work-study, before you take out any loans. Grants do not have to be repaid to the government, so it is always wise to accept grant money before a loan.
    • Federal loans offer lower, fixed interest rates that are favorable to private loans.
    • There are many different programs available to help you repay a federal student loan. Many of these programs offer flexible repayment or income-based repayment options. The U.S. Department of Education provides information about these programs.
  • Defaulting on a Federal Student Loan:
    • When a student loan payment is delinquent for more than 270 days, the loan goes into “default.”
    • A loan with a “default” status may have serious legal consequences plus loss of eligibility for future federal student aid.
    • The federal government has extraordinary powers to collect student loans if you default.
      • These powers include tax refund offsets and federal benefits offsets, and have no time limit.
    • Private Student Loans:
      • Private student loans are made available through banks and other financial institutions that lend money without any financial backing from the federal government.
      • There are no interest rate limits on private loans. These interest rates may end up being very high and cost the borrower much more in the long term.
      • A private loan will also require a good credit score to avoid high interest rates.
      • Most private loans do not offer the same range of flexible repayment plans and other borrower protections that government loans offer.

Avoiding Scams

  • A potential scam to avoid is paying money for any service that offers to help you complete a financial aid application or offers financial aid advice for a fee.
  • These services can cost a lot of money and are not necessary because there are many free resources available to help you with financial aid processes and information.
  • You should never have to pay for financial aid assistance. You may get help finding money for college, completing a FAFSA form, or getting help with your student loans for free through a college financial aid office, official websites, or the Federal Student Aid Information Center.
  • Another potential danger is identity theft. If you suspect your student information has been stolen, there are several steps you may take to report the activity.

For Profit Colleges

  • For-profit colleges are managed and governed by private organizations and corporations.
  • Problems that consumers sometimes encounter with for-profit colleges include inflated or misleading job placement rates, manipulation of student grades, and attendance records and illegal recruitment practices.
  • Consumers who are misled during the enrollment process and finance their education using federal student loans may be eligible for loan forgiveness programs.