Nelnet is a company that provides student loan services to help individuals pay for their education. If you’re looking to finance your education, it’s important to understand how student loans work and what options are available to you.
In this article, we’ll provide a comprehensive guide to Nelnet student loans, including the different types of loans available, how to apply, and how to manage your loans once they’re in repayment.
Types of Student Loans
There are two main types of student loans: federal student loans and private student loans. Federal student loans are issued and backed by the government, while private student loans are issued by banks and other private lenders.
Federal student loans have several benefits, including fixed interest rates, income-driven repayment plans, and the ability to have your loans forgiven or discharged in certain circumstances. Federal student loans also typically have more borrower protections, such as deferment and forbearance options, which allow you to temporarily pause or reduce your monthly payments if you’re facing financial hardship.
Private student loans, on the other hand, may have variable interest rates, may not offer income-driven repayment plans, and may not have as many borrower protections. However, private student loans may be a good option if you have exhausted your federal student loan options and still need additional funding for your education.
Stages of a Student Loan
The student loan process consists of several stages, including application, disbursement, and repayment.
- Application: To apply for a student loan, you’ll need to complete the Free Application for Federal Student Aid (FAFSA). The FAFSA is used to determine your eligibility for federal student aid, which may include grants, scholarships, and federal student loans. If you’re applying for a private student loan, you’ll need to apply directly with the lender.
- Disbursement: If you’re approved for a student loan, the funds will be disbursed to your school to pay for your tuition and other education-related expenses. Federal student loans are disbursed in installments, while private student loans may be disbursed in one lump sum.
- Repayment: Repayment begins once you graduate, leave school, or drop below half-time enrollment. During the repayment period, you’ll be required to make monthly payments on your student loans.
Federal Student Loans
There are several types of federal student loans available, including the Direct Subsidized Loan, the Direct Unsubsidized Loan, and the Direct PLUS Loan.
- Direct Subsidized Loan: This loan is available to undergraduate students with financial need. The government pays the interest on the loan while you’re in school, during the grace period, and during any deferment periods.
- Direct Unsubsidized Loan: This loan is available to undergraduate, graduate, and professional students. You’re responsible for paying the interest on the loan, even while you’re in school.
- Direct PLUS Loan: This loan is available to graduate and professional students, as well as parents of dependent undergraduate students. The interest rate on a Direct PLUS Loan is higher than the interest rate on a Direct Subsidized or Unsubsidized Loan
How FSA and Nelnet Work Together
The Federal Student Aid (FSA) office is a division of the U.S. Department of Education that administers federal student aid programs, including grants, scholarships, and loans. Nelnet is one of several loan servicers that work with the FSA to manage the repayment of federal student loans.
When you take out a federal student loan, you’ll be assigned a loan servicer, which is responsible for managing the repayment of your loan. Your loan servicer will be your primary point of contact for all matters related to your loan, including making payments, setting up a repayment plan, and requesting a deferment or forbearance.
Nelnet is a loan servicer that works with the FSA to manage the repayment of federal student loans. If Nelnet is your assigned loan servicer, you can access your account and make payments through the Nelnet website or by contacting Nelnet customer service.
Terms to Know
There are a few key terms related to student loans that it’s important to understand:
- Interest: Interest is the amount you’re charged for borrowing money. The interest rate on your student loan is the percentage of the loan amount that you’ll pay in interest.
- Grace period: A grace period is a specified period of time after you graduate, leave school, or drop below half-time enrollment during which you’re not required to make payments on your student loans. Federal student loans have a six-month grace period.
- Deferment: A deferment is a temporary suspension of loan payments, during which interest does not accrue on certain types of federal student loans. You may be able to defer your loan payments if you return to school, are serving in the military, or are experiencing economic hardship.
- Forbearance: Forbearance is a temporary suspension or reduction of loan payments. Interest continues to accrue on your loans during forbearance, and you’re responsible for paying the accrued interest.
If you’re a parent of a dependent undergraduate student, you may be able to help your child pay for their education by taking out a Direct PLUS Loan. A Direct PLUS Loan is a federal student loan that allows parents to borrow up to the cost of their child’s education, minus any other financial aid received.
To apply for a Direct PLUS Loan, you’ll need to complete a PLUS Loan application and promissory note at studentloans.gov. You’ll also need to pass a credit check to be approved for the loan.
If you have a Direct PLUS Loan, you’ll be responsible for making the loan payments. You can manage your loan and make payments through the Nelnet website or by contacting Nelnet customer service.
In conclusion, Nelnet is a company that provides student loan services, including the management of federal student loan repayment. If you have a federal student loan, it’s important to understand the terms of your loan and how to manage your repayment. As a parent, you may also have the option of taking out a Direct PLUS Loan to help your child pay for their education.
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