What Federal Student Loans Can Do

Federal student loans are guaranteed by the government, which means if you default on any loan repayment the government will back the lender financially for the loss. As these loans are guaranteed by the government; this reduces a lending bank's risk, so the loan's interest rates are typically lower. Federal student loans are made available under two major loan programs authorized under the Higher Education Act (HEA) of 1965, as amended: the Federal Family Education Loan (FFEL) program, authorized by Title IV, Part B, of the HEA; and the William D. Federal student loans are the most affordable loans available to students, with best interest rates and deferred payments (principal and interest) until after graduation. Typically, Federal student loans are extremely low risk loans, as compared with other types of unsecured loans,... [read full story]                    

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