Education is one of the vital parts of our lives and plays a significant role in the country’s development. When you talk about studying in the USA, the more important thing is to manage money to get admission to US Universities. If you applied for scholarships and other financial aids but still failed to grab funding for your expenses for education, then, there is the only choice left for you is to take a study loan.
A study loan is money you borrow from the government or any other private institute for your education completion and promise to return with an interest rate under terms and conditions.
Wondering who can get a study loan and how much can be granted? This depends on your education level, family financial status, and how much do you need as a loan to complete your studies? In this write-up, we discuss all these things.
Two types of Student Loans in USA
There are two types of study loans in the USA:
- Federal Loan
- Private Loan
Although there are two types of loans, students always prefer federal loans due to their easy terms and conditions.
Let’s Discuss How to Federal Study Loan
A federal loan is a study loan that government gives to students satisfying its eligibility criteria. It is not as easy that everyone can get it, somehow students who meet these criteria can be given this federal study loan:
There are few conditions based on which you can apply for a federal study loan. It depends upon;
- Your family’s financial situation.
- Whether your parents take responsibility for your school expenses ( tuition fee, bus fare, notes, notebooks, etc.).
- Your schooling timespan
- Year of your undergraduate
The most vital thing for a federal student loan is your family’s current financial status for approval subsidized and interest-free loan till schooling.
Distribution of Federal Study Loan According to Education level
The distribution of study loans is according to the level of education thus, further categorized into three.
- Dependent undergraduate
- Independent undergraduate
- Graduate student
#1 Dependent Undergraduate
The first-year students get an overall borrowing limit of $5500 and a subsidized limit of $3500. Every year $1000 increases in both limits. Students obtain an overall borrowing limit up to $31000 and a subsidized borrowing limit of $23000.
Here it is a bit favorable for independent than dependent due to no other financial support.
#2 Independent Undergraduate
Independent undergraduates get a study loan in the first year with overall borrowing limits of $9500 and a subsidized borrowing limit of $3500. The same criteria are applicable for Independent undergraduate, enhancement of $1000 yearly, and three-year program. The overall borrowing limit becomes $57500 and the subsidized borrowing limit is $2300.
#3 Graduate student
Graduate students can get more loans compared to undergraduate students but, they have no annual subsidized borrowing limit. After July 1, 2012, this rule is abolished due to some factors, which might not be good for it. But graduate students can get a borrowing limit of $20500 annually, and the total overall borrowing limit is $138500, and the total subsidized limit is $65500.
Medical students are also included in professional study loan programs, they get more aid from all organizations offering study loans. The annually total borrowing limit for medical degrees is $40500, and the total borrowing limit is $224000.
If we compare all these student loans programs, then the conclusion is that Medical students get an extra allocation of study loan grants. Moreover, most of the students prefer applying for the Federal study loan program compared to private study loans due to much better benefits and easy terms.