There are times when students and their families are not able to bear the huge costs of studying abroad that incorporate expenses such as the cost of tuition fees, housing, food, etc. Opting for an education loan is the best option in this case as it reduces the strain on your family savings and eradicates the need to liquidate your investments in fixed deposits, mutual funds, or bonds.
If you are not able to finance your studies by yourself, an education loan allows you to study at your dream destination. You can get a chance to experience living in a different city or a different country all by yourself. Students get to learn how to manage everything by themselves without anyone’s support.
It also allows you to meet and interact with people from different towns, states, or countries and provides the student with a chance to learn how to manage time between school, social activities, and life activities, daily chores, and managing your own budget. Living away from home grooms students in every sector including top-class education. The exposure that the student receives is beneficial for him/her in every aspect of life.
Though studying abroad has several benefits but the most important among all of those is that it prepares you for a better-paying job. Opting for an education loan can benefit you as an average four-year college graduate earns nearly twice the monthly salary of an individual who only has a high school diploma. Also, their unemployment rate is a little more than half, representing they are much more likely to be employed by organizations.
Now while opting for education loans, the question that if the student loan is federal or private is an important one to answer as different solutions apply based on the type of loan you’ve obtained.
Federal student loans, also known as government loans are regulated by various federal laws, and programs exist to help you manage those loans. Private student loans, on the other hand, carry with them no federally-mandated programs. There are state and federal collection laws, but dealing with them is a far more complex situation.
Federal Or Private?
The first step to figuring out whether your student loan is a private loan or a federal loan is you need to check if those loans are issued or guaranteed by the federal government.
If something isn’t issued or guaranteed by the federal government then it is more often than not a private loan.
Also, FYI almost all of the federal student loans are listed on the National Student Loan Data Services website. If a particular student loan is not listed there, it is most likely a private student loan.
Is There A Cosigner?
The other way to figure out if a student loan is federal or private is whether there’s a co-signer involved. Loans with cosigners are mostly private student loans because most federal loans are not credit-based. Therefore, most federal student loans do not call for a cosigner.
The only exception which may exist is in the case of PLUS loans, which may call for a cosigner.
Speak to your student loan provider
You can always speak to the student loan servicer, lender, or debt collector. They will be able to explain it to you properly as to whether it is a private or a federal loan.
Take a look at your credit report and student loan billing statements. Stafford, PLUS, Perkins, and Direct Loans are federal loans. Any other kind of loan is likely a private loan.
Getting in touch with a student loan lawyer
Once you are done with the footwork, you’ll have a better idea of the solutions. If you’re a borrower looking for some sort of help, a student loan lawyer near your area will be able to help you more than anyone else and will provide you with accurate information.
Now that you have figured out if the student loan is federal or private you need to take care of a few things such as the submission of accurate and true information. It is both lenders’ and borrowers’ duty to give legitimate and factual information while getting into a loan agreement.
If the data filled by you such as name, educational qualification, address, the nationality of the borrower or the guarantor, court cases, etc. are found to be fraudulent, the lender has every right to dismiss the education loan. Thus, it is highly recommended to give only honest and genuine information, upheld by valid documents.
Also while applying for student loans to study in a foreign country, the language requirement is the most important aspect. English is the most common language of Commonwealth and North American countries. Anyone applying for a course in universities in those countries needs to hand over proof to the bank authorities of their expertise in both written and spoken English. You can do this by appearing for TOEFL & IELTS tests. If you are unable to secure satisfactory grades in those exams, you might not be qualified to obtain a student loan to pursue higher education or work in foreign countries.
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