Pay No Interest on Your Loan
Low Income College Funding
Students who have high hopes of attending a college or university but severely lack adequate funding may be eligible for special subsidized federal loans. With a subsidized loan, you do not have to pay the interest on the loan. You won't have to bother with fluctuating interest rates and you'll save a healthy percentage of money compared to a loan where you are responsible for the interest.
Student Loans and Credit History
If you are a young student out of high school, you really don't have a credit history. In this situation, to get a subsidized loan would require you to fill out the FAFSA form and state your household financial situation. If your family has bad credit, this doesn't mean you will be considered for a subsidized loan.
Parents can have bad credit, but still have a high income, making the student ineligible as someone who is in-need. A regular unsubsidized Stafford Loan should work fine in this circumstance.
On the other hand, if your family has a low standard of living, you may be awarded a break on your student loans by not having to pay interest.
Federal Student Aid for Those In Need
The only place to get a loan without interest is through or directly from the federal government. All privately funded college loans will not discount interest since they would be losing money. The federal subsidy is an opportunity for the bright young students who are in an unfortunate financial situation.
Consolidation and Subsidized Loans
If some of your loans are subsidized, then you would naturally not need to bother with consolidation. However, most students with subsidized loans wind up having a mix of subsidized with unsubsidized. When interest rates are low, consolidation is beneficial for your unsubsidized loans.
Check with your financial aid office or lender to see exactly what type of loans you have out.
