Financial aid loans have been the source of a lot of news coverage lately. There have been some questionable practices and interest rates discovered as well as some rather unscrupulous lenders and some problematic repayment schemes.
Nevertheless, most students simply could not embark on a college education without the assistance of financial aid loans. These loans are an invaluable finance tool for obtaining a college degree, which will influence every penny earned for the remainder of a student’s life.
Financial aid loans backed by the government are available only at schools that meet state, regional, and federal accreditation standards. These loans are the safest, meaning the interest rates are associated with the government’s prime lending rate and the repayment plans are often quite workable, even for a graduate struggling with a budding career.
Banks and other financial institutions offer financial aid loans, too. The interest rates and repayment plans attached to these loans are regulated by the banking industry and can be different than those loans offered by the government.
Some employers offer financial aid loans to parents of children bound for college. These loans, too, are controlled by private entities and will likely differ from those offered by government sources. Nevertheless, they are an excellent opportunity to fund a college education.
It may be wise to beware of financial aid loans offered by private individuals, small unrelated corporations and charitable organizations, and other sources touting education loans under circumstances that seem too good to be true. Anything that meets this description is usually just that – too good to be true.
Not every school is accredited but many of them operate anyway, often via the internet. Many of them offer financial aid loans, too, but these loans should be reviewed very carefully, if not forgotten altogether.
Without full accreditation status, the school is at risk of being closed at a moment’s notice, or with no notice at all, in the worst cases. Financial aid loans offered or outstanding from these schools of questionable status can lead to some very serious financial woes in the future that can leave disastrous results on a student’s education process and his or her financial situation.
Don’t let the financial aid loans making the headlines of late scare you away from applying for financial aid if you need it. Just make sure to work closely with your school’s financial aid officers. They’ll know which options are sound investments and which ones are best avoided.