By Staff Writer

Not everyone can afford the rising cost of education nowadays. Psychological education, emotional education, and a lot of other courses are getting too hard to attain. Good thing there are a lot of programs that support the education of the less privileged. In the U.S., it is the Federal Family Education Loan (FFEL) program that is the most popular.

The federal government is constantly funding loans for both students and parents alike. A lot of funds are allocated to this program year after year and more and more families are given help. However, there are still a lot of families that are not familiar with how this program can be their knight in shining armor in terms of attaining a diploma. So to better understand this, it is better to know what the coverage of the FFEL program is.

The Stafford Loan

This type of loan is mostly popular among undergraduate, graduate, professional, and vocational students. The interest rate for this loan is pegged at 6.8 percent.

There are actually two kinds of federal Stafford loan, which are:

  • Subsidized. This is a need-based loan in where the government pays for the interests of the capital. On the side of the borrower, the payment will begin only after six months from graduation or dropping out of school of the student being funded.
  • Unsubsidized. This is, on the other hand, not a need-based loan. However, the interest will start to accumulate right after the disbursement of the fund. The students need to pay the interests while they are on school so as when the time of repayment comes, they only need to pay the principal loan amount.

The PLUS Loan

In this type of FFEL program, the parents who are given the opportunity to borrow money to cover the cost of their children’s education, whether it's for emotional education, psychological education, or any other field. The loan interest is fixed at 8.5 percent while the repayment period starts 60 days right after the last loan disbursement for a particular school year.

The Perkins Loan

With an interest rate of five percent, this program is only available to students of participating campuses. Undergraduate students are limited to get $4,000 annually while graduate students are able to get $6,000.

When speaking of repayment, it begins following nine months from graduation or dropping off from school. In most cases, the borrowers are given a repayment period of 10 years.

The Consolidation Loans

In this kind of program, a borrower is held qualified to combine two or more loans from different lenders and schools. In this case, the overall lender will pay off any existing family involvement to loans to create a new loan that will be payable for 30 years. The actual benefits of this loan are actually dependent on several family factors.

In total, the monthly payment for consolidation loans is less as compared to other kinds of loans. However, it will appear that they will pay more on the interests in the whole span of the repayment period. It depends on the family behavior if they will be better with this kind of loan.
 
The bottom line of having family education loan program is that every family will be given the chance to strive for the education of their children. As financial problem is one of the family factors of not sending a child to school, this kind of program is erasing this problem already. It only not enhances the family involvement in education but government involvement as well.