A guaranteed student loan is a loan that is backed, or guaranteed, by the Federal Government and extended to college and university students. Through this means, students can qualify for financial aid and the government guarantees that the college will be paid. Each state has a service that provides distribution and management of federally guaranteed student loans. The very latest information from colleges in each state regarding federal financial aid, can be found online by searching for the particular state's requirements.
Most colleges will encourage students to investigate several financing options before applying for Federal Student Aid with a Free Application for Federal Student Aid (FAFSA). There also are grants and scholarships that can help to pay for attending college. Therefore, financially responsible kids and parents should consider the responsibility to exhaust all avenues possible, before applying for a Federal Stafford Loan with an FAFSA. While this is a guaranteed student loan, there are special considerations with interest fees and payments with a Federal Stafford guaranteed student loan. They do not require payment until six months after graduation from college. However, some exceptions to the rule, include leaves of absence and dismissals from the college campus. Generally, these loans have variable rates for interest fees.
The application for assistance with college education can be filled out and submitted to any college. The extensive application is online or can be gotten from the financial aid office at the college. These applications for guaranteed student loans ask questions about a family's finances, and should be completed with as much detailed information as possible. Also, families are encouraged to read all documentation and to completely understand the promissory note, including personal rights and repayment strategies, because the guaranteed student loan must be repaid.
With college costs seemingly increasing each academic year, families may need additional help paying for education. An advantage therefore, with this financing option, is that payments are not due until after graduation, although they will need to be made. Defaulting on guaranteed student loans can result in damage to a credit report and compounding interest and late fees. There even can be serious consequences with tax returns and refunds. In some cases, the federal government can have a paycheck garnished to repay the debt. Careful consideration is therefore advised, before applying for the money to cover tuition, books, and living expenses. "Only by pride cometh contention: but with the well advised is wisdom" (Proverbs 13:10).
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