Not exact matches
I knew the basics —
federal loans are usually a cheaper and safer option
than private ones since they tend to have lower interest rates and better borrower
protections.
And while
federal loans come with their own set of challenges and risks, all 1.37 million private
loan borrowers are often subject to fewer
protections and less flexible repayment plans
than those offered under
federal loan agreements.Less accommodating repayment options and more rigid terms can quickly lead to private student
loan defaults, which is a dangerous financial place to be.
The
federal Environmental
Protection Agency ultimately rejected most of the
loan request because it was going to be used for basic construction rather
than cleaning water or helping the environment.
Due to the
federal insurance
protection offered by the FHA, you do not have to pay more
than the value of the home when it is sold, even if your
loan balance surpasses your home's value.
Federal loans don't require a credit history or a co-signer, and they offer more generous
protections for borrowers
than private student
loans do, such as income - driven repayment and
loan forgiveness.
If borrower
protections and
loan benefits matter more to you
than the interest rates, then you should stick to the
federal route when financing your college education.
In addition to lacking borrower
protections, private student
loans usually carry a higher interest rate
than federal student
loans, which ultimately makes private student
loans more expensive.
However, the greater likelihood is that you will lose out on
protections and benefits and may not get much of a lower rate since
federal loans generally have lower interest rates
than private
loans.
S. 2231 — Student
Protection and Success Act [Sen. Jeanne Shaheen (D - NH)-RSB- would rescind
federal student
loan eligibility for higher education institutions at which less
than 15 percent of students are not repaying their
loans within three years of graduating or leaving school.
Another problem is the private student -
loan market, which generally charges students higher interest rates
than the
federal student -
loan program and offers students fewer
protections like economic hardship deferments.
The Consumer Financial
Protection Bureau, a
federal agency, estimated in May that total student debt is nearly $ 1.2 trillion, and that
federal student
loans alone make up more
than $ 1 trillion in outstanding debt.
Roughly one - fifth of graduates» debt (19 percent) was in private
loans, which are generally more costly and provide far fewer consumer
protections and repayment options
than federal student
loans, TICAS reports.
And while
federal loans come with their own set of challenges and risks, all 1.37 million private
loan borrowers are often subject to fewer
protections and less flexible repayment plans
than those offered under
federal loan agreements.Less accommodating repayment options and more rigid terms can quickly lead to private student
loan defaults, which is a dangerous financial place to be.
Bear in mind that private student
loans are typically harder to qualify for, and will likely carry higher interest rates (and fewer borrower
protections)
than federal student
loans.
Take those figures and multiply them by the number of people estimated to hold
federal and private student
loans, and the magnitude of debt becomes evident: More
than 40 million individuals collectively owe upward of $ 1.2 trillion, according to the Consumer Financial
Protection Bureau (CFPB).
And while
federal loans come with their own set of challenges and risks, all 1.37 million private
loan borrowers are often subject to fewer
protections and less flexible repayment plans
than those offered under
federal loan agreements.
You're giving up a lot in the refinancing process, and in some cases you're better off with the
protections offered by
federal student
loans than you are with a lower interest rate.
If you have
federal student
loans and want to keep their
protections, you may have options other
than refinancing to lower your interest rates, so explore those first.
The Consumer Financial
Protection Bureau, a
federal government agency, issued a report in 2014 that showed the majority of payday
loans are made to borrowers who renew their
loans so many times they end up paying more in fees
than the amount they originally borrowed.
A major benefit to consolidating rather
than refinancing is that you will keep the borrower
protections that
federal student
loans offer — but that many private student
loans do not.
These
loans tend to have fewer
protections than federal student
loans, which is why many consider them to be an option of last resort.
Since CommonBond's
loan program is a private
loan, there are fewer
protections than available with
federal student
loans.
This blog from Consumer Finance
Protection Bureau documents how there are 27.8 million student
loan borrowers making use of the direct
federal lending program totaling more
than $ 1 trillion in debt.
Here's what Kiplinger's personal finance magazine says college students don't need: New textbooks, a high - end computer, a printer, a pricey smartphone plan, cable TV (watch streaming videos on a computer), a car (especially for freshmen), overdraft
protection on bank accounts, campus health insurance (assuming coverage under the family's health plan) and private
loans, which carry higher interest rates and less flexible repayment plans
than federal loans.
Due to the
federal insurance
protection offered by the FHA, you do not have to pay more
than the value of the home when it is sold, even if your
loan balance surpasses your home's value.