Loan Requirements

The U.S. Department of Education plans to make or guarantee more than $65 billion in student loans for 2007. Educational loan funding is at an all-time high. There are a few easy things you can do in order to keep your share of that money.

Apply Early
Reapply for your Federal loans early in order to avoid long lines or slow Web pages. When you're offered a loan, the Federal government will give you anywhere from a few weeks to a few months to choose how much of the loan to accept. Be sure your current address is correct, so you receive your paperwork in time.

You should apply as early as January for the Fall term. Be sure to keep the password and PIN information you used when you filled out a Free Application for Federal Aid (FAFSA) online.

Important Details
Big life changes can affect both current and future loans. Any of the following can potentially affect your financial aid:

• Status Change: Dropping below half-time status can change your loan amount and may make you ineligible for some loans.
• Leaving school: Taking time off for any reason can activate your loan's grace period with both private and Federal lenders.
• Graduation: You should generally expect to begin repaying your loans six to nine months after you graduate or leave school.

Know Your Interest Options
Adjustable rates may initially start low to entice buyers, but an adjustable interest rate changes along with the market, and could affect your total payments. On the other hand, a fixed rate loan may start with a higher rate than an adjustable, but the percentage will not change for the course of the loan.

If your loan is packaged with an adjustable rate, be sure your lender sets a rate change maximum to ensure that the rate doesn't spiral out of control. If your lender doesn't promise to keep rates reasonable, find a lender that does.

Know Your Repayment Options
Failing to make timely payments can put your loan into default. A Federal loan in default gives the government the legal right to take a percentage of your wages every pay period until the loan is repaid in full. A loan turned over to a collections agency can affect your credit, regardless of your employment situation. It may be possible to defer payments if you become a teacher in certain areas or join the military or Peace Corps. In most situations, be prepared to repay your loan.

Stay informed on the details of your loan package. If you're the expert on your loan package, you'll be less likely to be surprised by a changing interest rate or policy.