Financing College with Direct Student Loans

By: Mevish Jaffer

In today’s competitive workforce, having a college degree is not just helpful, it’s often necessary, even for most entry level positions. This is because the higher a person’s education level, the better their chances are for landing a good job. Unsurprisingly, the number of students who enroll in colleges and universities across the nation continues to grow each year. Some people attend college directly after graduating from high school, while others choose to go back later after taking some time off to work or travel. However, the cost for higher education does not come cheap. In fact, many students require loans in order to finance the cost of attendance. One of the many types of loans made available for this purpose is a direct federal student loan.

Direct student loans are loans that are availed through the government and are provided directly to the student or the student’s parents/guardians. The federal direct student loan can be used to finance both undergraduate and graduate education, as well as various types of vocational schooling. Some examples of direct federal student loans include the Perkins loan, Stafford loan, and PLUS loan. Individuals can apply for these types of direct student loans by filling out the FAFSA (Free Application for Federal Student Aid) form, which can be found on the financial aid web site and can be completed online.

Most individuals prefer to apply for federal direct student loans due to the many benefits they offer, including the most competitive interest rates and the option to have deferred payments. Additionally, there are also other advantages that borrowers can benefit from by using the direct student loan servicing system to finance their education. The online direct student loan servicing system enables college students to monitor and maintain their direct student loans by providing several tools and features that are easy to use and navigate through including:

1. Entrance & Exit Interviews
With direct student loan servicing, loan applicants are able to take both the entrance and exit counseling interviews, which help them to understand everything about their loans.

2. Account Management
The direct student loan servicing system provides an account management tool, where loan borrowers can access their account online. The tools featured on account management also enable them to calculate monthly payments, interest, and principal amount. Additionally, loan recipients can monitor their payment history and manage billing, as well as personal contact information.

3. Tax Information
One of the major pieces of information required for a direct student loan is the applicant’s 1098-E tax information. Borrowers usually receive these details at the beginning of every year, in January-February. However, it’s possible for students to access their tax information earlier by downloading the form on the direct student loan servicing site.

4. Electronic Services
The direct student loan servicing system also provides loan recipients with many convenient electronic services on their automated web site. For instance, students can receive e-bills and send out emails regarding any account discrepancies.

5. PIN Number Information
The U.S. Department of Education usually provides loan recipients with individual PIN numbers, which can be used to access their loan information online. However, for students who do not receive this information, or for those who simply misplace or forget their number, direct student loan servicing offers the option to retrieve the PIN and allows students to change the number as well.

For borrowers who may be experiencing difficulty with repaying their existing direct student loans, consolidation is a solution worth considering. With direct student loan consolidation, borrowers can combine all of their debt into a single loan. Consolidation also works to reduce interest rates and lower monthly payments. Overall, direct student loan consolidation provides students with more of a flexible repayment plan so they can successfully pay off their debt. For added convenience, borrowers can also apply for consolidation through the direct student loan servicing web site.