Many potential students are entering college or returning to school in part to increase their earning potential so that they can pay off debt and improve life for themselves and their family. That debt has often resulted in missed payments and other factors that damage credit scores badly. It would be a great disservice to them if the funding they need to get improve their education were denied to them, and thankfully, government student loans are available to those with bad credit.
The first choice of those with bad credit is either a Direct Federal Loan or the Federal Family Education Loan Program, or FFELP. These are the core programs offered by the government, and neither of them requires good credit, since there is no credit check done during the application process. Qualifying is based solely on need, making them especially attractive to those with bad credit, since low income and even poverty are often a major part of the problem.
These options are available to both independent students and dependents living at home. They can be sought for graduate education, and are a popular choice for adults returning to school after being in the workforce. These low-interest loans are a wonderful step in rebuilding your financial situation and restoring good credit, in addition to helping provide you the education you need to fulfill your goals and destiny.
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Are you a high school student planning to attend college, but need tuition assistance to make your dreams a reality? Are you an older prospective student returning to school? The good news is that federal student aid is available to almost all who apply. Before you visit your school’s guidance office or look to apply online, here’s what you should know. First, you’ll need to fill out the FAFSA, which is the Free Application for Federal Student Aid. It is the core document used to determine your eligibility for tuition assistance and loans.
Once that is done and reviewed, you’ll be notified of which programs you qualify for, and a Student Aid Report about your qualifications will be sent to all the schools you applied to. The institutions use it as the basis for offering you a specific package of funding. The most common loan programs from which the funds come are the Direct Federal Loan program with the government as the lender, and the FFELP, or Family Federal Education Loan Program, in which the money comes from private sources but is backed by the federal government. These are needs-based programs with assistance levels based on your income, or your family’s income if you are a dependent. They offer low-interest loans that you do not have to begin paying back until you have completed your education or stopped taking classes.
Some state governments offer tuition and loan assistance as well, often in conjunction with federal programs, but not always. It is worth checking for the availability of these loans after you have begun the process on the federal level.
Once you have been qualified for a loan, the money will be disbursed. With a Direct Federal loan, the Treasury Department sends a check directly to your school to cover tuition, fees, housing if applicable, and if there remaining funds, they will be presented to you in check form.
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Loan forgiveness involves having a part or all of a federal student loan canceled. It is a resource for those who have received any type of federally offered or guaranteed student loan in the past, but who then find it impossible to pay it back. If you become disabled, the chances of having part, or all, of your loan erased are high. However, this is not why most pursue loan forgiveness. Serious debt is the primary reason former students seek relief through this program.
If you plan to seek help through the Government Student Loans Forgiveness Program one of two things will be required of you – a significant commitment to volunteerism, or entering the military. The types of volunteering that qualify an individual to have loans forgiven center on community service at home or abroad. Examples include joining a government sponsored program such as AmeriCorps, VISTA, and the Peace Corps.
Enlisting in the military in an active duty role may qualify you for relief since each branch has a loan forgiveness program. Joining the Army Reserves or the National Guard will also provide opportunities for loan forgiveness.
Besides these most common options, becoming a teacher, medical personnel, or lawyer, and then choosing to work among under-served populations may qualify you for loan forgiveness. Teaching in a low-income area, working in a free medical clinic, or becoming a public defender is viewed as choosing service over financial compensation, and the government rewards that with loan forgiveness.
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