BATON ROUGE, La. (WAFB) — Trying to find the money to send your teenager to college can be a challenge. And while student loans are an option, it’s a topic many families want to know more about, especially when money is tight and there’s uncertainty about the upcoming school year.
The Federal Office of Student Aid (FSA) has tools and information to help you better understand student loan investing right now.
One of the biggest questions families have at this time of year is whether or not you should take out a student loan.
Fixed federal student loan rates are at their lowest level right now. Direct loans issued on or after July 1, 2020 and before July 1, 2021 have an interest rate of 2.75% for undergraduates, up from 4.53% last year.
That means you could save hundreds or thousands of dollars on the amount you’ll have to repay over time if your student takes out a loan for the 2020-2021 school year.
Understanding how loans work is another challenge for an incoming student.
The FSA office has released a new online tool to help you and your child get a better idea of how that money works. The loan simulation tool offers three services to put you on the right path to repayment.
An upcoming interactive feature is the I want to simulate borrowing extra money feature. This will show you how the choice of school and time plays a role in how much money you will need to borrow and repay after graduation.
The other two features help you find the best loan repayment strategies based on your goals and some things to consider if you ever have trouble with payments in the future.
When you click on one of these features, a series of questions will guide you to match your situation with the right plan for your family.
These tools are also useful for current student loan payers. Use your FSA login information to better investigate your federal student loan status.
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